Warren Buffett Backed This Consumer Brand for 38 Years. Here's Why Greg Abel Will Keep Holding.

There's a reason why they call Warren Buffett "the Oracle of Omaha." In his 60-year career at the helm of Berkshire Hathaway, he made some incredibly shrewd moves that continue to pay off for the conglomerate even after Buffett's retirement.

One such investment is Coca-Cola (NYSE: KO). Buffett had Berkshire start buying the stock 38 years ago and gradually accumulated 400 million shares through a series of transactions and stock splits.

And while Coca-Cola may not be a flashy name on Wall Street, the investment is incredibly lucrative, which is why I believe new CEO Greg Abel will direct Berkshire to continue to hold Coca-Cola stock for a long time.

Former Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

Coca-Cola and its amazing dividend

One of the best things about investing in the Coca-Cola stock is the dividend. The nation's leading beverage company rewards investors with a dividend yield of 2.6% and has consistently juiced the payout. In fact, Coca-Cola has increased its dividend for 65 consecutive years, putting the company in the rarefied air of Dividend Kings -- companies with at least 50 years of dividend hikes in a row.

Here's why that's so important for Abel and Berkshire today. According to Berkshire's most recent annual report, the conglomerate reports $1.299 billion as the cost basis of its Coca-Cola investment. And in 2025 alone, Berkshire received a whopping $816 million in dividends from its investment, or essentially 62.8% of its entire cost basis in a single year.

That's an extraordinary number. Put another way, Berkshire Hathaway more than makes up the cost of its Coca-Cola investment every two years. The company's $1.299 billion investment was valued at $27.96 billion at the end of 2025.

With that kind of return, why would anyone sell? Coca-Cola stock is the gift that keeps giving.

Why is Coca-Cola so successful?

Coca-Cola is best known for its carbonated beverages, including the namesake product line. But it also makes other products, such as Sprite, which is now the No. 3 soft drink in the U.S., as well as a variety of teas, waters, sports drinks, juices, coffees, and even some alcoholic beverages.

While headquartered in Atlanta, Coca-Cola is very much a global brand. The company reported improved revenues in all its geographic segments, resulting in 12% overall growth in net revenues to $12.5 billion in the first quarter. Its portfolio of products served it well -- the Asia-Pacific region had Q1 growth in juices, value-added dairy and plant-based beverages, while tea products sold strongly in emerging markets Latin America and the Asia-Pacific.

"We're always pushing ourselves to do even better and focusing on getting more from our markets and more from our brands to drive balanced growth," CEO Henrique Braun said.

Why Greg Abel will hold Coca-Cola stock

One thing that Buffett and Berkshire Hathaway have proven is that you don't need investments to be exciting. Berkshire's portfolio includes time-tested consumer companies like Coca-Cola, Kraft Heinz, and American Express instead of flashy names like Space Exploration Technologies and Sandisk. Coca-Cola is a mature and familiar business that has provided decades of business growth and dividend increases -- currently paying $2.12 per share annually.

Dividends don't have to be flashy when you're holding shares for decades. Consider that Berkshire's shares cost the company less than $4 each, on average. So getting $2.12 in annual dividends is incredibly lucrative when compared to the historical cost.

When Abel considers Coca-Cola stock, he doesn't have to decide whether it's a good investment at today's price. He just has to decide whether he wants to keep getting about $800 million every year without lifting a finger.

That's why I think Abel will hold Coca-Cola stock as long as he's at the helm of Berkshire Hathaway.

American Express is an advertising partner of Motley Fool Money. Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Express. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.