How To Collect $1,000 Per Month From Warren Buffett's Favorite Dividend Stock

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Legendary investor Warren Buffett has achieved astounding returns throughout his career. From 1964 to 2022, his company Berkshire Hathaway Inc. delivered an overall gain of 3,787,464%, dwarfing the S&P 500’s 24,708% return during the same period.

Other than picking stocks that skyrocketed in value, Buffett also collects dividends — a lot of dividends.

Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.”

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Plenty of companies in Buffett's portfolio pay dividends to shareholders. The most notable is perhaps Coca-Cola Co.

Buffett started buying Coca-Cola shares in the late 1980s. Today, Berkshire holds 400 million shares of the beverage giant that are worth $23.1 billion.

It's no secret that Buffet has been a fan of the soft drink. He once said, "If I eat 2,700 calories a day, a quarter of that is Coca-Cola."

More importantly, Buffett has unwavering confidence in the company's business.

"If you gave me $100 billion and said take away the soft drink leadership of Coca-Cola in the world, I'd give it back to you and say it can't be done," he said.

That confidence is paying off handsomely in the form of passive income. In 2022, Coca-Cola paid four quarterly dividends of 44 cents per share — or $1.76 per share for the year. Considering that Berkshire held 400 million shares of Coca-Cola, it collected $704 million in dividends from the company last year.

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Coca-Cola was paying quarterly dividends of 44 cents per share in 2022. But the payout isn't standing still. In February 2023, Coca-Cola's board approved a 4.6% increase to the quarterly dividend to 46 cents per share.

That marked the company's 61st consecutive annual dividend hike.

Despite the ups and downs the world economy went through over the last six decades, Coca-Cola shareholders received bigger dividend checks every year.

Coca-Cola follows a quarterly distribution schedule. If you want to collect $1,000 per month from the company, you are looking at $3,000 per quarter. And that means you would need to own 6,521.74 shares of the company. This is calculated by dividing the $3,000 by the per-share quarterly payout of $0.46.

And because Coca-Cola currently trades at $57.81 per share, 6,521.74 shares would mean about $377,022 worth of the stock.

If you aim for a smaller target of earning $200 per month — or $600 per quarter — you would need 1,304.35 shares ($600/$0.46) or $75,404 worth of Coca-Cola stock (1,304.35 x $57.81).

Despite the company's solid dividend growth track record, shares can still be volatile. Year to date, Coca-Cola stock has fallen about 8%.

Morgan Stanley analyst Dara Mohsenian sees better days ahead for the beverage company. The analyst has an Overweight rating on Coca-Cola and a price target of $70 — around 21% above where the stock currently sits.

Remember, stocks can fluctuate wildly, and even top analysts aren't right 100% of the time. So always conduct comprehensive research and due diligence before diving in.

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