3 Reasons Investors Should Not Follow Warren Buffett Into Coca-Cola Stock
Coca-Cola (NYSE: KO) looks like one of the more appealing Warren Buffett stocks at first glance. The 400 million shares owned by his company Berkshire Hathaway make up more than 9% of shares outstanding. Also, from an original $1.3 billion investment, it is on track to generate $704 million for Berkshire in dividend income alone, a 54% annual return.
But despite this success, investors should not consider following Buffett into Coca-Cola stock. Three reasons illustrate why this might turn into a losing proposition for investors.
Admittedly, those looking at the company's stock performance may want to ignore the advice to stay away as Coca-Cola reaches record highs. Over the last 12 months, it logged a 14.8% total return level (including dividends) and outshined the S&P 500's total return of -3% over that time frame. Moreover, Coca-Cola is a Dividend King, a title earned by 60 straight years of payout hikes.
Source Fool.com
