Warren Buffett is a huge fan of dividend stocks. In the billionaire investor's recent letter to Berkshire Hathaway shareholders, he called these investments the "secret sauce" behind his company's fantastic returns over the decades.

Buffett singled out Coca-Cola (NYSE: KO) as a stellar example. Annual dividend payments from that one investment have grown from $75 million in 1994 to over $700 million today, and all Berkshire has had to do in that time is hold Coke shares and collect the cash. Buffett has no intention of selling the stock and interrupting that income stream, either. "We expect those checks are highly likely to grow," he told shareholders.

Investors who buy Coke today can't expect the same level of massive dividend growth over the next few decades. But the stock is still likely to deliver excellent returns from here. Let's look at some reasons why this dividend giant belongs in your portfolio.

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Source Fool.com