Key Points
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Berkshire Hathaway’s stock portfolio holds many companies across various sectors.
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Buffett has always focused on buying stocks long-term that will perform well over an entire economic cycle.
- 10 stocks we like better than Coca-Cola ›
It’s hard to believe that Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) stock is still underperforming the broader market this year. Yes, there is a new chief overseeing the company, Greg Abel, and it’s the first time in over six decades that former CEO Warren Buffett has not sat at the helm.
Still, Buffett is executive chairman of the board and remains actively involved in the company. While the large conglomerate depends on more than just its equity portfolio, some of Berkshire’s largest stock holdings have generated strong gains this year.
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In fact, Berkshire has already made close to $8 billion in gains and $424 million in dividends this year from one of its oldest, most boring stocks.
Image source: The Motley Fool.
Playing defense has its perks
Berkshire first began purchasing the iconic consumer beverage company Coca-Cola (NYSE: KO) in the late 1980s and completed its 400 million share purchase in 1994. It’s one of Berkshire’s oldest holdings, if not the oldest.
Today, Berkshire still owns all 400 million of its shares, and Coca-Cola is the third-largest position in Berkshire’s portfolio, accounting for nearly 10% of capital.
Coca-Cola, while an iconic brand, is not a high-flying artificial intelligence stock. Rather, it is viewed as a best-in-breed consumer staples stock, which is best owned in times of economic turbulence and extreme uncertainty.
As AI-related concerns persist, investors have rotated into consumer staples, leading to strong gains for Coca-Cola, with shares up nearly 29% this year (as of July 29). Coca-Cola also recently reported strong second-quarter earnings, flexing its marketing muscles during the FIFA World Cup to draw more attention to the brand.
Not only did Coca-Cola raise its full-year guidance, but trademark Coca-Cola volume growth of 5% in the quarter is the strongest seen in 17 years, excluding the COVID-19 recovery.
Coca-Cola has also shown the ability to adapt over the years to changing consumer preferences. The company no longer just carries sugary soda drinks, but has a diversity of different beverage brands, including diet soda, water, coffee, and tea, among others.
Furthermore, the company’s strong supply chain has helped it effectively manage the aluminum and steel tariffs implemented last year, which do impact the business.
Core positions like Coca-Cola are what make Berkshire a strong stock to own
Coca-Cola’s 29% appreciation thus far in 2026 has resulted in over $7.9 billion in gains for Berkshire. Additionally, Coca-Cola has paid out $1.06 per share in dividends through the first six months of the year, resulting in another $424 million in passive income for Berkshire.
While Coca-Cola is undoubtedly a Buffett pick through and through, Abel, in his first letter to shareholders earlier this year, provided further commitment to the company.
Abel listed Coca-Cola as one of four core positions and “businesses we understand well, have a high regard for their leaders, and expect will compound over decades. This concentrated approach will continue, with limited activity in these holdings,” Abel wrote.
Coca-Cola’s performance will not make or break Berkshire Hathaway, which, again, is a large conglomerate with significant energy assets, one of the largest property and casualty insurance businesses in the U.S., a large mortgage operation, and much more.
However, it’s Berkshire’s decision to make long-term investments in companies like Coca-Cola that demonstrates its discipline and holistic approach to investing. Coca-Cola will not make you rich overnight, but it will make you rich over decades, which is exactly what the stock has done for Berkshire.
Berkshire buys stocks that will perform well throughout an entire business cycle and balances its portfolio so that when the broader market is underperforming, it has defensive consumer staples stocks like Coca-Cola to pick up the slack. It’s one of many reasons Berkshire is such a good stock for investors to own.
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
