This Warren Buffett Dividend Stock Looks Attractive for a Recession-Proof Portfolio
The Coca-Cola Company (NYSE:KO) is an American multinational beverage company. It is a long-time favorite of Warren Buffett and stands as one of the most recognizable and dependable consumer staples companies in the world. Its iconic brand and loyal global customer base provide the company with significant pricing power, enabling it to grow revenues steadily, even during periods of economic uncertainty.
Despite macroeconomic pressures such as weaker demand in key markets like the US and Latin America and currency-related headwinds in Q1 2025, The Coca-Cola Company (NYSE:KO) continued to deliver. The company reported a 2% increase in global sales volumes and a 6% rise in organic revenue, staying aligned with its long-term growth goals. Between 2021 and 2024, its revenue grew from $38.6 billion to $47.06 billion, while gross profit surged from $23.3 billion to $28.6 billion.
In recessionary environments, The Coca-Cola Company (NYSE:KO)'s value proposition becomes even more compelling. Its products—ranging from essential bottled water to affordable treats like soft drinks—remain in demand when consumers cut back on premium spending. The company also expanded its share within the ready-to-drink beverage category, underlining its strategic execution. As CEO James Quincey noted, the company's 'all-weather strategy' continues to deliver resilient results despite economic and geopolitical uncertainties.
From a shareholder perspective, The Coca-Cola Company (NYSE:KO) is a powerhouse. The company has increased its dividend for 63 consecutive years, which is an extraordinary record that it held firm through the Great Recession and the COVID-19 pandemic. In FY2024, it generated $6.8 billion in operating cash flow and $4.7 billion in free cash flow, returning $9.4 billion to shareholders in dividends alone.
While the current dividend yield of 2.85% might not be the highest on the market, it reflects remarkable consistency. For Warren Buffett, whose Berkshire Hathaway owns 400 million shares, that translates to approximately $800 million in annual dividend income. His long-term confidence in The Coca-Cola Company (NYSE:KO) stems not just from brand strength but from its proven ability to generate and return cash, regardless of external conditions.
In an uncertain market, Coca-Cola's stability, consistent cash flow, and long history of dividend growth make it a strong candidate for any income-focused portfolio.
While we acknowledge the potential of NOC as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than NOC but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the .
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