Warren Buffett’s widely regarded as the greatest investor of the modern era. And for good reason. Since the 1960s, he’s delivered an annualised return of 19.9%, more than double the stock market’s historical average.
To put that in practical terms, an investor putting away just £250 a month for 20 years at this rate would accumulate close to £765,805.
By comparison, the same investor using an index fund generating 8% would likely end up with around £147,255.
So how does he do it?
Understanding moats
Buffett’s edge comes down to one concept above all others: the competitive moat. A moat is the structural advantage that protects a business from competition over time. It might be an unbeatable brand, a distribution network that takes decades to replicate, or a product so embedded in daily habits that consumers never think to switch. The wider and deeper the moat, the more durable the returns.
And no stock in Buffett’s playbook illustrates this better than Coca-Cola (NYSE:KO). Buffett first bought Coca-Cola shares for Berkshire Hathaway’s portfolio back in 1988.
Today, Berkshire holds 400m shares and collects around $848m in dividends every year from that single position alone. And since that same advantage continues to dominate in 2026, to this day he’s never sold a single share.
So does the stock still make sense to buy today?
Is Coca-Cola still a good investment?
Looking at the group’s latest first quarter results for 2026, revenue rose 12% year-on-year to $12.47bn and adjusted EPS climbed 18% to $0.86.
The latter was comfortable ahead of the $0.81 that analysts were expecting, demonstrating the firm’s ability to keep impressing with every operating segment posting positive volume growth, while boosting operating margins.
Total unit case volume grew 3% globally, with Coca-Cola Zero posting a remarkable 13% increase, sucessfully capturing younger, health-conscious consumers without cannibalising its core business.
What’s more impressive, this volume growth came even after the firm raised prices. And it goes to show that Coca-Cola’s brand-driven pricing power remains rock-solid.
Subsequently, full-year earnings growth guidance was raised from a target 7%-8% range to 8%-9%. And that certainly makes the business seem like a Buffett stock still worth buying. So where’s the risk?
Is there anything to worry about?
Despite the strong results, there are still some blemishes. Asia Pacific operating income fell 14%, weighed down by affordability initiatives in India and commodity cost pressures in tea and coffee. And this impact was ultimately amplified by currency headwinds.
But even if management sucessfully overcomes these headwinds, investors seeking Buffett-like returns in 2026 may be left disappointed.
At a $355bn market-cap, this stock’s unlikely to deliver near-20% annualised gains over the next two decades, even less so given the premium price-to-earnings ratio of 26 attached to the stock today.
So is it really worth buying?
For investors who’ve already established a solid chunk of wealth, Coca-Cola might still be a lucrative, boring stock to consider. But for those seeking to build chunky wealth, it’s likely better served as an example of what traits to look for in other younger businesses today.
Luckily, both the UK and US stock markets are still full of promising opportunities right now.
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Zaven Boyrazian does not hold any positions in the companies mentioned.
