“`html
Key Points on Warren Buffett’s Investment Strategy
Warren Buffett emphasizes investing in stocks with competitive advantages rather than just high dividend yields. His strategy includes analyzing a company’s underlying cash flow to support sustainable dividend growth, along with seeking discounted valuations.
Coca-Cola as a Case Study
Buffett’s long-term investment in Coca-Cola (NYSE: KO), which he first purchased in the 1990s, highlights his focus on brand strength and competitive advantages. Berkshire Hathaway currently holds 400 million shares of Coca-Cola, which has consistently grown its dividends due to strong cash generation.
Importance of Free Cash Flow
Strong and increasing free cash flow is crucial for maintaining and growing dividends. For example, Apple (NASDAQ: AAPL) has seen its free cash flow per share rise by 132% over the last decade, contributing to a 100% increase in its dividend per share during the same period.
“`
