Warren Buffett — who introduced he’s stepping down from Berkshire Hathaway on the finish of 2025 — has left an indelible mark on the investing world.

Because the mid-Nineteen Sixties, Berkshire’s shares have delivered a shocking common annual return of 20.1%. To place that into context, the S&P 500 has produced a mean return of 11.4% during the last 50 years. So it’s no marvel skilled and retail buyers alike eagerly comply with the most recent on what Buffett’s been shopping for and promoting.

The ‘Oracle of Omaha’ hasn’t all the time received it proper, as his $433m buy of Dexter Shoe Firm in 1993 confirmed. However as his wider report reveals, the uncommon misfires have been comfortably dwarfed by his many years of choosing winners.

With this in thoughts, right here’s a prime Buffett share I’m contemplating including to my very own portfolio: The Coca-Cola Firm (NYSE:KO).

A Buffett magnificence

The Coke producer is probably Buffett’s most well-known holding. Since shopping for his first shares within the late Eighties, he’s steadily constructed his stake and Berkshire in the present day owns 400m shares. That’s equal to round 8% of the delicate drinks large’s excellent shares.

Solely Apple, American Categorical and Financial institution of America command bigger locations in Berkshire’s portfolio.

Buffett’s not offered a single share in Coca-Cola down the years. He loves the terrific model energy of its drinks — the likes of Coca-Cola, Fanta, and Sprite all stay in excessive demand in any respect factors of the financial cycle, making it one of the sturdy companies on the planet.

Because the desk reveals, Coca-Cola is by far the world’s strongest non-alcoholic drinks model, and the one such product with Model Finance’s ‘AAA+’ model power score. That’s due to the corporate’s distinctive markets and lengthy observe report of market-leading innovation.

Which means if volumes endure throughout downturns, Coca-Cola can hike costs to offset this and continue to grow earnings. It will possibly additionally scale back the affect of rising prices on the underside line. Whereas case volumes rose simply 2% in January-March, focused price hikes meant natural gross sales improved by a a lot more healthy 6% over the quarter.

This in flip meant earnings per share improved 5% 12 months on 12 months.

Dividend king

In addition to its formidable model energy, Coca-Cola’s robustness can also be helped by its multi-sector publicity. It manufactures power drinks, espresso, juices, water and alcohol alongside its world-famous delicate drinks.

The agency’s endurance can also be due to its extensive geographic footprint, which protects group earnings from weak point in a single or two territories. At this time, round 2.2bn of the corporate’s drinks are strong throughout 200 nations in developed and rising markets.

This multinational strategy does depart it weak to antagonistic forex actions. However thus far this hasn’t derailed the corporate’s sturdy historical past of earnings development.

By the way, Metropolis analysts assume Coca-Cola’s annual earnings will rise one other 20% in 2025. This additionally leads them to tip one other increase within the yearly dividend, the sixty fourth in a row.

At this time, Coca-Cola shares commerce on a premium price-to-earnings (P/E) ratio of 24.2 instances. It’s the kind of industry-high valuation that might immediate it to fall sharply in price if investor confidence begins to waver. But regardless of this danger, I feel the delicate drinks star is greater than worthy of this princely valuation.

It’s why I’m contemplating including it to my very own portfolio.