Dividends and Quiet Reflections

Mr. Buffett, a man who once considered dividends a rather vulgar display, has, in his long tenure, conceded their quiet utility. Berkshire Hathaway, for decades, returned capital in other ways, preferring, it seemed, to reinvest in the grand, unfolding drama of commerce. A single dividend payment, in 1967, is a footnote now, a momentary lapse in a long-held principle. He claims to have been elsewhere when the matter was put to a vote – a convenient alibi, perhaps, or a subtle acknowledgement that even the most steadfast convictions can bend to circumstance.

It is, however, the receiving of dividends that seems to hold a particular appeal. The portfolio, built over decades, contains a number of companies that reliably distribute a portion of their earnings. Two, in particular – Coca-Cola and Domino’s Pizza – appear poised to offer a slight increase in these distributions. A modest gesture, certainly, but one that speaks to a certain stability in a world increasingly defined by its volatility.

Coca-Cola

Coca-Cola. The very name evokes a particular shade of brown, a fizzing sweetness, and a history that stretches back over a century. Mr. Buffett began acquiring shares in the late 1980s, a decision made, one suspects, not for the thrill of innovation, but for the comforting predictability of the brand. Berkshire Hathaway holds a substantial stake – 400 million shares – which, in 2025, yielded a dividend of $816 million. A considerable sum, to be sure, but one that feels, somehow, insufficient to capture the full weight of the company’s cultural presence.

The company, of course, is no longer merely about the beverage itself. It has expanded into a multitude of categories, acquiring brands and extending its reach. This diversification is, undoubtedly, a shrewd move, but one cannot help but wonder if, in the pursuit of growth, something of the original essence has been lost. The scale is immense, the distribution network unparalleled, and the customer loyalty, while still strong, feels less fervent than it once was.

The third quarter of 2025 saw an adjusted operating margin of 31.9%, a slight improvement over the previous year. Organic revenue growth was a respectable 6%, driven, the company claims, by its broad portfolio. A comforting narrative, perhaps, but one that does little to dispel the sense that Coca-Cola is, at this stage, more a monument to its past successes than a harbinger of future innovation. The company anticipates free cash flow of $9.8 billion. A significant amount, yet it feels…contained.

Coca-Cola has raised its dividend for 63 consecutive years, earning it a place among the “Dividend Kings.” A remarkable achievement, undoubtedly, but one that feels less like a triumph and more like a continuation of a long-established routine. Another increase is expected in February, likely in the 5% range. A predictable outcome, and one that, in its predictability, offers a certain melancholy reassurance.

Analysts expect earnings to climb by 7.7% in 2026. Currency exchange rates, they say, will play a role. External factors, always so convenient. The payout ratio is currently around 69%, a reasonable level for a company of this size and maturity. The stock trades at 24 times forward earnings – a fair price, perhaps, for a business that has, in many ways, reached its natural plateau.

Domino’s Pizza

Domino’s Pizza. A more recent addition to the Berkshire portfolio, acquired in stages over the past year. Mr. Buffett, it seems, has developed a fondness for the delivery of hot, cheesy sustenance. One wonders if this decision was driven by a genuine belief in the company’s potential, or simply by a late-life craving for convenience. The next 13-F filing will reveal if this acquisition continues, a curious detail in the grand scheme of things.

The company has invested heavily in its brand, and has achieved strong same-store sales growth. A commendable effort, but one that feels increasingly difficult to sustain in a crowded market. The scale is impressive, with thousands of stores both domestically and internationally. This allows for cost advantages, which are passed on to franchisees. A pragmatic approach, certainly, but one that lacks a certain…poetry.

Instead of battling delivery apps, Domino’s struck deals with them. A sensible compromise, perhaps, but one that feels like a surrender of control. The company has also implemented a “fortressing” strategy, building multiple stores in close proximity to drive awareness and increase convenience. A clever tactic, but one that feels…aggressive. Carryout sales are up, while delivery sales have slowed. A subtle shift in consumer behavior, or simply a reflection of changing economic conditions?

Management remains confident about the future, predicting 3% same-store sales growth in 2026 and beyond. Combined with mid-single-digit unit growth, continued improvements in gross margin, and the benefits of scale, Domino’s should produce strong earnings growth for years to come. Analysts expect an 11% rise in earnings per share. Optimistic projections, perhaps, but ones that seem…disconnected from the realities of everyday life.

The dividend yield is currently 1.7%, with a payout ratio of less than 40%. This gives management plenty of room to raise the distribution. Another increase in the mid-teens may be coming in February. A modest gesture, perhaps, but one that offers a fleeting moment of reassurance in an uncertain world. The stock trades at less than 21 times analysts’ expectations for 2026 earnings. A good value, perhaps, but one that feels…transient.

The market, like life itself, continues its relentless march forward. Dividends are paid, stocks are bought and sold, and fortunes are made and lost. It is a cycle that has repeated itself countless times throughout history, and one that will undoubtedly continue long after we are gone. A quiet melancholy settles over the portfolio, a sense of peaceful resignation. The dividends, after all, are merely a small consolation in the face of eternity.

2026-02-09 14:33

Coca-Cola

Domino’s Pizza

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