Here’s a Warren Buffett share I’m considering adding to my portfolio!

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

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

With this in thoughts, right here’s a high Buffett share I’m considering adding to my personal portfolio: The Coca-Cola Firm (NYSE:KO).

A Buffett magnificence

The Coke producer is maybe 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 gentle drinks big’s excellent shares.

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

Buffett’s not bought 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 strong companies on the planet.

Because the desk exhibits, 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 ranking. That’s thanks to the corporate’s distinctive markets and lengthy monitor 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 worth 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 vitality drinks, espresso, juices, water and alcohol alongside its world-famous gentle drinks.

The agency’s endurance can also be thanks to its huge geographic footprint, which protects group earnings from weak spot in a single or two territories. Right now, round 2.2bn of the corporate’s drinks are strong throughout 200 nations in developed and rising markets.

This multinational method does depart it susceptible to hostile foreign money actions. However to date this hasn’t derailed the corporate’s robust 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 elevate within the yearly dividend, the sixty fourth in a row.

Right now, Coca-Cola shares commerce on a premium price-to-earnings (P/E) ratio of 24.2 occasions. It’s the type of industry-high valuation that would immediate it to fall sharply in worth if investor confidence begins to waver. But regardless of this threat, I believe the gentle drinks star is greater than worthy of this princely valuation.

It’s why I’m considering adding it to my personal portfolio.