When it comes to investing wisdom, few names resonate as strongly as Warren Buffett. As the face of modern investing, Buffett has curated a portfolio filled with stocks that many consider “boring.” Interestingly, his investment strategy eschews flashy technology stocks, focusing instead on tried-and-true consumer goods companies that yield stable dividends. If you’re venturing into the stock market, following Buffett’s time-tested advice might be your best bet. Rather than chasing the latest tech buzz, discovering the value in industry stalwarts could be the key to a diversified, resilient portfolio.
Two stocks that exemplify this strategy are Coca-Cola (NYSE: KO) and Domino’s Pizza (NYSE: DPZ). Coca-Cola, a cornerstone of Buffett’s investment philosophy, has been a reliable choice since 1985, while Domino’s represents a newer addition to his holdings. So, with 2025 approaching, which one should you consider adding to your portfolio?
Berkshire Hathaway acquired its first shares of Coca-Cola over three decades ago, amassing a substantial 9.3% of the company’s total equity today, which comprises 8.4% of Berkshire’s portfolio. Coca-Cola’s strength lies in its unbeatable global brand recognition and robust distribution network, delivering beloved beverages worldwide. Despite inflationary pressures, Coca-Cola has demonstrated remarkable pricing power, maintaining its appeal through strategic price increases while consumers gradually regain spending confidence.
What truly sets Coca-Cola apart is its status as a Dividend King, having consistently raised its dividend for an astounding 62 consecutive years. Buffett’s focus on resilience in tough economic climates is exemplified here; Coca-Cola has navigated numerous challenges—ranging from economic downturns to pandemics—without faltering on its dividend increases.
As of 2024, Coca-Cola’s stock saw a modest increase of 6%, offering a dividend yield of 3.1%. It’s worth noting that this yield has remained relatively stable, providing reliable income amid market fluctuations. With its global footprint, Coca-Cola has a strategic advantage, allowing it to mitigate region-specific challenges while continuously enhancing shareholder value—a testament to its long-term durability.
Switching gears to Domino’s, Buffett’s latest investment reflects the changing dynamics of fast-food and the quick-service restaurant industry. Domino’s has emerged as the juggernaut of the pizza market, capitalizing on its vast franchise network, with over 20,000 locations across 94 regions. Its performance remains impressive: in the latest fiscal third quarter, revenues surged by 5.1%, showcasing consistent growth even amidst global economic uncertainties. With projections of opening 800 to 850 new stores in 2024, Domino’s resilience and growth potential are geared for long-term success.
While Domino’s does not boast the same dividend pedigree as Coca-Cola, with a more modest yield of 1.4%, its recent dividend growth has been notable. Since 2013, it has raised its annual dividend by a staggering 655%, revealing a commitment to returning value to shareholders in a substantial manner.
When evaluating these two solid investments for 2025, you will witness both companies trading at an identical P/E ratio of 26. However, Coca-Cola’s entrenched stability provides a clear edge, particularly for investors seeking reliable long-term growth and income. The company’s vast experience navigating market volatility makes it a go-to choice for those prioritizing dependable investments.
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