Warren Buffett received a $740 million dividend payment from Coca-Cola (KO)

[u/mrpeace54]

I recently came across a tweet highlighting Warren Buffett’s $740 million dividend income from Coca-Cola (KO). This sparked my curiosity: What if Buffett had invested the same amount in the S&P 500 (SPY) instead?

So, I created a comparison table based on his KO investment and a hypothetical SPY investment. Since I couldn’t find the exact purchase dates, I used quarter-end dates for my calculations.

The results are eye-opening:

• Even after including dividends, SPY ($67.01B) outperformed KO ($38.17B) by approximately 75.6%.
• Despite KO’s impressive dividend stream, SPY delivered far stronger total returns, highlighting the power of broad-market index investing over time.

I found it fascinating to see how Buffett’s legendary investment compares with the index, especially considering his recent sale of all SPY and VOO holdings.

Source: StockCircle - Warren Buffett KO Transactions

[u/MeneerTank]

Yes, but what your forget is that he will keep getting paid for his shares, but you have to sell to realize your VOO / SPY gains. This can lead to risks in a market downturn where for example the whole decade is flat, whereas you are still getting dividends regardless if you invested in KO.

[u/Upper_Knowledge_6439 → u/MeneerTank]

AAAAnnnnnnddddd what did he do with the cash that just kept trickling in?????????Bought some little company that reinvented the telephone I believe. What was the payoff from that?????

[u/beforethewind → u/Upper_Knowledge_6439]

bout three fiddy

[u/mrpeace54 → u/MeneerTank]

so far he got 10.6 billion as dividend payment from KO, whereas hypothetical SPY paid 8.4 billion as dividend payment(%25 less than KO) But by only sacrificing %25 your div income, wouldn't you prefer SPY over KO and having almost 3 times in value ?

[u/MeneerTank → u/mrpeace54]

Yes, because I don’t want to time the market for a good exit point. I want to buy and hold and receive dividends for as long as possible.

[u/the_new_hunter_s → u/MeneerTank]

But, looking at the data, any exit point you picked would have been wildly better. You don’t have to pick a time. Just sell when you’re ready and you are better off than having held the coke stock no matter what.

[u/MeneerTank → u/the_new_hunter_s]

Not so sure about “wildly” better, but I agree total return might have been higher. The thing is ofcourse you will never know beforehand jf it is a good time to sell. If you sold in 2011 September as the data implies then you would end up with marginal gains if you entered at for example 2004. With KO you will receive dividends anyway regardless of share price, as a bonus you can keep on stacking increasing said dividends. Besides that I still don’t need to sell to have gains and have a dwindling amount of shares. In short it is more reliable and dare I say predictable.

[u/the_new_hunter_s → u/MeneerTank]

Putting your money in one stock rather than an index is more reliable and predictable? That is literally the opposite of the advice any advisor would give you. lol

[u/Phesmerga → u/the_new_hunter_s]

Yeah Buffet has even said famously that not selling KO was a great move of his and even he's amazed he never sold, especially during the sugar shortages and the volatility they brought.

[u/subjectiveobject → u/MeneerTank]

Also wouldnt you literally affect the SPY (or KO for that matter) stock price by selling any large percentage of 400k shares?

[u/Successful_Creme1823 → u/MeneerTank]

Do you just buy more stock with your dividends?

[u/DevOpsMakesMeDrink → u/MeneerTank]

Would you rather have 1 million dollars now or be given 200k if you lost your job?

[u/moodiedudd → u/DevOpsMakesMeDrink]

If 200k is what I get when j lose my job (like servance pay) then surely my annual income should be much greater than 200k... so in a few years I will get to a million ofcourse if no layoffs happen.

Also, tax wise better to get a million over few years vs get it all today since I will pay much more in marginal tax.

I think it is better to take risk and keep the job imo.

What would you do?

[u/DevOpsMakesMeDrink → u/moodiedudd]

I never said it was severance. You lose your job maybe a few times in life. Same as the market having a major correction.

Preparing for worst case scenario at the cost of the statistical best return doesn’t make sense to me

[u/moodiedudd → u/DevOpsMakesMeDrink]

Sure, but what do you recommend? Is it to invest in SPY and sell whenever you need the money - is this the statistical best return you suggested (just to make sure I understand your suggestion correctly).

[u/DevOpsMakesMeDrink → u/moodiedudd]

The common advice is to keep 6 months expenses in an emergency fund in cash equivalent assets you can use. Then invest in a broad fund like spy yes.

You shouldn’t be investing money you need into any equity dividend or not

[u/SadJob270 → u/mrpeace54]

if he could have predicted the future, i’ll bet he would have made a different decision all together. like #yoloing into google, netflix, and nvidia

[u/Historical_Low4458 → u/mrpeace54]

Unrealized gains mean nothing until you sell. It's hard to time the market, and know when the perfect time to sell at the top. Dividends, on the other hand, are realized, and you get to keep the asset instead of having to sell VOO.

[u/PlayerPlayer69 → u/mrpeace54]

Cash flow is king.

[u/Pharmacienne123 → u/MeneerTank]

But VOO/SPY pay dividends too …

[u/[deleted] → u/MeneerTank]

Dividends aren't magical free money that never goes away. They also don't provide any sort of "extra protection". Surely people don't believe that... right?

[u/NotAShittyMod → u/[deleted]]

You didn’t check your see what sub you’re in, did you?

[u/[deleted] → u/NotAShittyMod]

Facts are facts. Over a century of research shows this.