Warren Buffett Is Raking In a Yield of Nearly 63% From This Dividend King (No, That’s Not a Typo)

By Keith Speights 

Key Points

• The secret behind Buffett’s monster dividend yield is his buy-and-hold strategy.
• This dividend stock has also generated tremendous returns for Buffett over the long term.
• It’s still a great pick for income investors, although growth and value investors might prefer to look elsewhere.

NYSE: KO

This dividend stock continues to make Buffett smile.

Warren Buffett loves dividends. Don’t be fooled by the fact that he has never wanted Berkshire Hathaway (BRK.A 0.42%) (BRK.B 0.38%) to pay a dividend. The legendary investor frequently talks about the dividends Berkshire receives from its investments. And nearly every stock in the conglomerate’s portfolio pays a dividend.

Some of those stocks generate a lot more income than others. Buffett is raking a yield of nearly 63% from one Dividend King. And, no, that’s not a typo.

Image source: The Motley Fool.

The secret behind Buffett’s monster dividend yield

That Dividend King I’m referring to is The Coca-Cola Company. You might wonder how Buffett is enjoying a yield of nearly 63% when Coca-Cola’s forward dividend yield currently stands at only 3%. That’s a good question with a simple answer.

Buffett first initiated a position in Coca-Cola in 1988. He added to Berkshire’s stake over the next few years, eventually spending around $1.3 billion to acquire a significant stake in the giant beverage and food company.

Although Buffett hasn’t always adhered to his favorite holding period of forever, he’s on the right track to do so with Coke. The stock is his longest-held position. Berkshire still owns 400 million shares, making Coca-Cola the conglomerate’s fourth-largest holding.

Those 400 million shares generate annual dividends of $816 million for Berkshire. Dividing that total by the $1.3 billion Buffett initially spent to buy the stock gives an effective dividend yield of roughly 62.7%.

The secret behind Buffett’s monster dividend yield, therefore, boils down to a buy-and-hold strategy. It’s also helped that Coca-Cola has increased its dividend every year since the legendary investor first bought the stock.

Coca-Cola has given Buffett more than dividends

Coca-Cola hasn’t only generated nice dividends for Buffett through the years, though. It has also provided jaw-dropping returns.

Since early 1988, Coca-Cola’s share price has skyrocketed almost 1,300%. This includes four stock splits along the way. Importantly, though, that gain doesn’t include dividends. With dividends reinvested, Coca-Cola’s total return during the period is over 3,100%.

KO data by YCharts

Coca-Cola has also given Buffett something else: refreshment. The multibillionaire said at Berkshire’s annual shareholder meeting in May as he picked up a can of Coke, “At 94 years of age, I’ve been able to drink whatever I like to drink.” (Buffett turned 95 on Aug. 30, 2025, by the way.)

Buffett has mentioned in the past that he typically drinks five cans of Coca-Cola each day. He said in a 2023 interview, “I think happiness makes an enormous amount of difference in terms of longevity. And I’m happier when I’m drinking Coke or eating hot fudge sundaes or hot dogs.”

Is Coca-Cola stock a buy now?

While Coca-Cola is unquestionably one of Buffett’s favorite stocks, he hasn’t bought additional shares in a long time. Is Coca-Cola stock a buy now? I think the answer depends on your investing style.

If you’re a growth-oriented investor, Coca-Cola probably won’t appeal to you very much. The stock has lagged well behind the S&P 500 (^GSPC -0.10%) in recent years. Wall Street analysts also project that Coke’s earnings will grow more slowly than the S&P 500’s earnings in 2025 and 2026.Collapse

NYSE: KO

Key Data Points

Dividend Yield

3.01%

What if you’re a value investor as Buffett has been throughout his career? Coca-Cola might not be at the top of your list, either. The stock’s forward price-to-earnings ratio is 21. While that’s not a terribly lofty valuation, it likely isn’t cheap enough to attract much interest from value investors.

On the other hand, if you’re an income investor, Coca-Cola looks like a great stock to buy right now. We’ve already mentioned the company’s status as a Dividend King and its solid dividend yield. I think income investors can count on this stock to keep the dividends flowing and growing for years to come — just as it has for Buffett over the last four decades.

Dividing that total by the $1.3 billion Buffett initially spent to buy the stock gives an effective dividend yield of roughly 62.7%.

Remember with compound interest, you will make more money in the last few years than in most of the earlier years, so even if you have a modest amount to start your Snowball, the sooner you start the sooner you will finish. GL

UK coloured flags waving above large crowd on a stadium sport match.

Every investor has their own priorities when deciding which UK stocks to buy. Some look for rapid growth, some for high income. The latest ‘Dividend Dashboard’ from fund platform AJ Bell highlights something else to consider.

It has high praise for companies with long records of increasing dividends every year, arguing this can help drive the share price higher over time. It counted 17 FTSE 100 members with an unbroken dividend streak lasting a decade or more. Happily, two of the best are on my watchlist.

The first is London Stock Exchange Group (LSE: LSEG). Over the last decade it’s delivered a total return of 408.8%, turning £10,000 into £50,880. Dividends have risen at an average compound growth rate of 15.5% a year in that time, which is remarkable. Yet the trailing yield is just 1.51%, which is misleading

London Stock Exchange Group slows

The group’s share price is actually down 18% over the last 12 months. It’s even down 5% over five years. My view is that it simply ran too far ahead of itself, trading on a price-to-earnings ratio of around 32 at one stage, more than double the FTSE 100 average. Investors were pricing in a lot of growth that didn’t quite come through.

First-half results, released on 31 July, looked good to me. Adjusted earnings per share rose 20.1% to 208.9p. The interim dividend was lifted 14.6% to 47p. Management also launched a £1bn share buyback.

The shares still look a little pricey, trading at a P/E of 23.5. There are also questions over how artificial intelligence (AI) might affect demand for its data products, by reducing headcounts at City terminals. Yet the world increasingly runs on data and I still like the long-term outlook, which is why I bought the stock last week. After reading the AJ Bell report, I’ll consider buying more.

Intermediate Capital Group shines

The stock looks cheaper than LSEG with a P/E of 14.25 and has a higher trailing yield of 3.68%. It would be higher still if the share price hadn’t done so well.

Q2 results on 16 July showed assets under management rose 8.2% to $122.57bn. Fee-earning assets climbed 11% year-on-year to $82.19bn, while fundraising hit $3.4bn.

Progressive dividend policies

There are risks. Private equity groups like Intermediate Capital Group rely on selling successful assets for profits, and the pool of buyers has shrunk lately. Smaller companies have also been hit by higher interest rates, which push up the cost of capital while inflation eats into potential future returns.

That said, the group’s long-term record is compelling. I’ve got some cash to invest in case the market dips in September and October, and I will seriously consider buying this stock if it does. I’ve waited long enough.

The AJ Bell research underlines an important lesson. A progressive dividend policy can be more valuable than a high but unreliable yield, over the longer run.

Current cash to re-invest £1,495.00

Current xd cash £1,120.00

Dividend Reset = Opportunity to Grab This 9.2% Yield at a Discount

Brett Owens, Chief Investment Strategist
Updated: September 17, 2025

Most Wall Street “suits” are allergic to dividend cuts. These spreadsheet jockeys sooooo lack imagination. They prefer linear trends—up and to the right.

Dividend growers model nicely. Payout “resets” (cuts!) do not. So, there is often a knee-jerk reaction from analysts to sell every divvie slash they see.

Same goes for most individual income investors. These vanilla beans sold BlackRock Health Sciences Term Trust (BMEZ) late last week when BlackRock sliced the dividends for three of its popular funds.

The weaker hands sold. Big payouts remain. As contrarians, we’re intrigued.

Dividend cuts, ironically, often mark the start of opportunity. Here’s what the knee-jerk sellers miss:

• Even after the trim, BMEZ still yields 9.2%.
• The fund trades at an 11% discount to its net asset value (NAV)—a generous “free money” cushion.
• BlackRock itself has been buying back shares when the discount widens, a confident signal from management—and rare shareholder friendly move from a closed-end fund (CEF)!

In other words, the “bad news” is already priced in. This nifty 9.2% monthly dividend can now be had for 89 cents on the dollar.

Why the deal? Because this is a CEF. Unlike ETFs or mutual funds, CEFs raise a fixed pool of capital at launch. After that, shares just trade back and forth on the exchange.

That creates inefficiencies—often big ones. When investors sell (like last week), they often dump CEF shares without looking at the underlying assets. Discounts widen, even if the portfolio is perfectly fine.

That’s when dividend deal hunters like us step in!

CEF discounts open the door. Politics blow it off the hinge. Wall Street is worried about President Trump letting RFK Jr. “go wild on health” from his perch at HHS. The first-level fear is that pressure on drug prices is bearish for healthcare.

But remember Trump 1.0: big pharma lagged, while biotech and medical device makers soared. BMEZ’s portfolio today is a blend of biotech and medical device makers with big potential. These aren’t cartel-like insurers or big pharma names whose product prices the government may cap.

BMEZ holds the kinds of firms that benefited the most in Trump 1.0: healthcare innovators that thrive when regulation lightens.

Top holding Alnylam (ALNY) is a pioneer in “RNA interference”—a cutting-edge class of medicine that essentially turns off disease-causing genes. Alnylam’s therapeutics are being explored for treating genetic, heart and neurological diseases.

Bad genes? Alnylam fixes them.

The company’s research benefits from less regulation. The stock soared under Trump 1.0, racking up 300%+ gains. And the sequel is shaping up to be even bigger with ALNY already up 90%:

BMEZ Top Holding Loves the Trump Life

Number two BMEZ holding, Veeva Systems (VEEV), gained a fantastic 570% under Trump 1.0. The life sciences software and data provider benefits from a looser healthcare mergers and acquisitions environment because Veeva’s existing customers install Veeva’s platforms on newly-acquired corporate laptops.

VEEV shares lost 4% in Biden’s four years as sector M&A slowed, but they are already up 29% as the healthcare deals begin to flow.

ALNY and VEEV are increasingly hot tickers, and deservedly so. But they are hidden beneath the cloak of BMEZ! The discount to NAV means we’re paying less than 90 cents on the dollar for this duo.

Dexcom (DXCM), is the fund’s number three holding. It makes continuous glucose monitors that are quickly replacing old-school finger sticks for diabetes management. Its stock climbed 354% under Trump 1.0.

Let’s put the dividend reset in perspective. We are moving from a variable monthly overpayment to a consistent 11 cents per month. BlackRock is like a carpenter. Management measured twice so that they can cut just once and leave the payout at these levels for the foreseeable future:

BlackRock Measures Twice, Cuts Once

So we have a 9.2% divvie supported by the current administration’s policies. With an 11% discount to boot! The vanilla sellers may regret dumping this well-supported monthly dividend.

If this monthly dividend discussion sparked an “ah ha!” moment for you, well, welcome! Wall Street has been feeding you the equivalent of “junk food” financial advice your entire life.

The 4% withdrawal rule? C’mon man! BMEZ yields 9.2% which is enough to live on dividends without tapping our principal.

Plus, it trades at an 11% discount—which means upside is likely! What a cherry deal.

None of the vanilla maxims generate passive income. It’s time to clean up the financial diet. Trim down the “buy and hope” desperation and beef up the dividends.

Real Estate Credit Investments Limited (the “Company”)

Ordinary Dividend for RECI LN (Ordinary shares)

Real Estate Credit Investments Limited announces today that it has declared a first interim dividend of 3.0 pence per Ordinary Share for the year ending 31 March 2026. The dividend is to be paid on 17 October 2025 to Ordinary Shareholders on the register at the close of business on 26 September 2025. The ex-dividend date is 25 September 2025.

If you buy SUPR today the fcast dividend is 6.18p per share.

The current price to buy is 78.9p a buying yield of 7.75%.

The yield should gently increase, although there are never any guarantees.

So in around ten years time, if the Trust still trades, you should have received all your capital back.

You would have achieved the holy grail of investing in that you would be receiving income from a share that sits in your account at a zero, zilch cost.

If you re-invest the earned dividends into another high yielding trust you will also be earning income a blended yield of around 15% plus on your seed capital.

If you are lucky enough to have another ten years to invest, you can do it all over again but with a much shorter time scale.

If you do buy, remember the rules of the Snowball.

A home for your hard earned as you wait for markets to fall, which they will but the timing is the unknown.

	Company Name	Place change
1	Royal London Short Term Money Mkt Y Acc	Unchanged
2	Artemis Global Income I Acc	Unchanged
3	Vanguard LifeStrategy 80% Equity A Acc	Unchanged
4	L&G Global Technology Index I Acc	Up three
5	HSBC FTSE All-World Index C Acc	Unchanged
6	Vanguard FTSE Glb All Cp Idx £ Acc	Up three
7	Vanguard LifeStrategy 100% Equity	Up one
8	Ranmore Global Equity	New
9	Scottish Mortgage Ord SMT0.45%	New
10	Greencoat UK Wind UKW0.96%	Down four

For the past four weeks our top three funds have remained the same, with Royal London Short Term Money Mkt Y Acc still in pole position. The fund offers a “cash-like return”, with its yield closely linked to the Bank of England’s base rate. As well as low-risk income, the Royal London fund can be seen as a place to park cash while awaiting new opportunities.

In second place was Artemis Global Income. This value-focused fund is light on US exposure, holding just under one-third of its portfolio in the country. In contrast, the MSCI World Index, which follows the ups and downs of 1,320 global stocks across 23 developed markets, holds 72% in US companies. The Artemis fund launched 15 years ago, and the same stock picker – Jacob de Tusch-Lec – remains at the helm. 

Tracker fund Vanguard LifeStrategy 80% Equity held on to third place. It was joined by another fund from the same stable, Vanguard LifeStrategy 100% Equity, in seventh place.

There were two new entries, although both are no strangers to the top 10. Scottish Mortgage Ord 

SMT

0.45%, which invests in high-growth global companies, re-entered the table in ninth place. It was joined by Ranmore Global Equity, another global actively managed fund in 10th place. The value-focused Ranmore fund is also light on US exposure (with around a 20% weighting). It has been a stellar performer over the past three and five years, up 91.7% and 161.1%, while the average global fund has returned 31% and 53.2%, 

The value investment style involves selecting stocks that appear to be trading at prices lower than their true value. Such out-of-favour companies tend to have a low price/earnings (PE) ratio, which compares a company’s value with its profits. If the company pays dividends, it will tend to have a high dividend yield.

Such companies tend to be found in sectors that are more economically sensitive, including finance, energy and materials. Value stocks are cheaper than growth stocks, with valuations more reflective of current earnings rather than future potential.

UK dividend investment trust City of London and global tracker Fidelity Index World both exited the table this week.

Funds and trusts section written by ii’s Kyle Caldwell.

Retirees: 2 Covered Call ETFs For Income And Peace Of Mind

Summary

• Covered call ETFs like GPIQ and GPIX offer retirees attractive income streams, especially when held in tax-advantaged accounts such as Roth IRAs.
• GPIQ provides Nasdaq-100 exposure with active management, a lower expense ratio (0.29%), and strong performance versus peers, making it ideal for income-focused investors.
• GPIX offers broader S&P 500 diversification, a similar cost structure, and outperforms many competitors, balancing sector concentration and yield for steady monthly payouts.
• Both funds prioritize ordinary income and capital gains distributions, with active management helping mitigate risks and NAV erosion, making them suitable for retirees seeking reliable income.

Introduction

As a military retiree, I’ve developed a soft spot for retirees of the traditional retirement age. Although I have a long way to go before reaching the age to be able to withdraw my dividends tax-free, this is an advantage traditional retirees have over us younger investors.

Moreover, with the plethora of covered call funds in recent years, this makes it easier for those of age to withdraw tax-free if you own a tax-advantaged account like a Roth IRA. If this is you, then you may want to consider this covered call duo for reasons I’ll discuss later.

Collecting A Nice Stream Of Income Has Never Been Easier

Below you can see the chart of the growing popularity of derivative income among investors. Until around 2021/2022, inflows remained flat but rose rapidly over the past 4 years or so, likely due to high inflation.

With inflation increasing since the pandemic and forcing the Fed to raise interest rates as a result, consumers have definitely felt the impact, increasing the need for more income.

Below you can see inflation spiked in 2021, causing rates to rise. Since then, inflation has slowly come back down, currently sitting at 2.7%, closer to the Federal Reserve’s target of 2%.

With unemployment rising and risks growing of a recession, rate cuts appear imminent, although uncertainty remains due to tariffs. I do think we’ll see at least one rate cut this year, something I’ve echoed over the past year.

And while consumers are likely to feel relief from lower rates, the need for additional income won’t likely decrease as a result.

Moreover, if you’re a retiree currently living off income, then covered call ETFs may be worth considering. And for reasons I’ll lay out below, this duo may be suitable for your tax-advantaged accounts.

#1 Goldman Sachs Nasdaq-100 Premium Income ETF (GPIQ)

First on the list is the covered call ETF by asset manager Goldman Sachs (GS). For starters, I’ll say I haven’t been much of a fan of their BDC, Goldman Sachs BDC (GSBD), but their covered call ETFs seem solid so far.

For one, they’re actively managed instead of passively. And their main goal is to provide income with the potential to see capital appreciation, perfect if you’re a retiree. If you’re of age, it’s likely you focus more on income vs. capital appreciation, which is why covered call funds may be a good fit for your portfolio.

GPIQ looks to track the performance of the Nasdaq-100, so it’s obvious the fund is highly concentrated in the Technology (XLK) sector. They currently have 107 holdings and use an overwrite strategy to write calls on a varying percentage of the portfolio, usually between 25% and 75%.

Additionally, they use Flex Options, which allows management to change the options strike prices and dates, mitigating downside risks somewhat. This also allows them to participate in potential upside, not capping it like a lot of covered call ETFs do.

Something else I also like about GPIQ is that their expense ratio is more reasonable when compared to other premium income ETFs at just 0.29%. This means for every $10,000 invested, you’re paying an annual fee of roughly $30.

Some peers have expense ratios closer to 1%, or even above. For comparison, the NEOS NASDAQ-100(R) High Income ETF (QQQI) has an expense ratio of 0.68%, more than twice that of GPIQ.

JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) and Roundhill Innovation-100 ODTE Covered Call Strategy ETF (QDTE) were higher at 0.35% and 0.97%, respectively.

Below is how each fund performed over the past year in comparison to the S&P (SP500). GPIQ outperformed, up 13.59% in price returns.

When adding in distributions, GPIQ also outperformed, although only slightly when compared to QQQI. While GPIQ managed to beat QQQI, the latter saw less of a dip during April’s Liberation Day, down 1.53% compared to 2.70% for GPIQ.

With a distribution yield of nearly 10%, GPIQ does have the lowest amongst the peer group. But their lower cost structure and better performance may be an attractive trade-off.

#2 Goldman Sachs S&P 500 Premium Income ETF (GPIX)

The other half of the duo is another fund by the asset manager, GPIX. Although both funds have a lot of the same holdings, like NVIDIA (NVDA), Microsoft (MSFT), Apple (AAPL), and Amazon (AMZN), GPIX has Berkshire Hathaway (BRK.A) (BRK.B) in its top 10 holdings.

And since they track the S&P, they have a significantly larger portfolio with 508 holdings currently. Both GPIQ and GPIX share the same active strategy, expense ratio, and inception date of October 24, 2023.

The difference is GPIX doesn’t have as high a concentration in the technology sector, with this making up 33.29% of its portfolio compared to 53% for GPIQ. The Financial (XLF) sector is GPIX’s second largest sector, while Communication Services (XLC) is GPIQ’s second largest.

GPIX has outperformed its peer group, even the popular NEOS S&P 500(R) High Income ETF (SPYI), up 8.32% in the past year compared to the latter’s 4.11%.

In total returns, GPIX managed to again edge out SPYI, but the YieldMax Universe Fund of Option Income ETFs (YMAX) bested the entire peer group in total returns. But this is due to their ridiculously high yields. YMAX’s current distribution yield sits above 67%, compared to 8.16% for GPIX and 11.83% for SPYI.

Why This Pair Is Attractive For Retirees

While many covered call ETFs’ distributions are considered return of capital, both GPIQ’s and GPIX’s distributions are mostly ordinary income or capital gains. Meaning, they’re better held inside a tax-sheltered account like a Roth IRA. Return of capital distributions are tax-deferred until sale, making them more appealing to younger investors with taxable accounts.

Hypothetical $100,000 Investment

Below is what you’d collect monthly if you invested $100,000 split between both funds using their average distributions through the first 9 months. Investors should also be aware that distributions can vary.

But both funds’ distributions have stayed relatively similar to previous months. At the current price of around $51/$52 a share for both at the time of writing, you’d collect $744 on a monthly basis. While this may not be enough to cover something like a mortgage, this could be used for medical expenses, car payments, or unexpected bills.

Fund	Share Price	Share Count	Avg distribution	Monthly Payout
GPIQ	$51.49	971	$0.4210	$409
GPIX	$51.57	969	$0.3456	$335

Furthermore, there are covered call funds, like many of YieldMax’s, with much higher yields, but the risk with these is continued NAV erosion, which leads to price decay over time.

So far, both GPIQ and GPIX have performed well as a result of NAV growth. And because they are both actively managed, management will rebalance its portfolio to mitigate underperformance.

Risks & Takeaway

Technology stocks have continued to perform well and carry the market overall. But both funds are subject to downside if the tech sector enters into a correction. Because the sector has performed well recently, it could underperform going forward if the market experiences a crash or correction.

For investors looking to buy, it may be prudent to wait for a potential pullback like the one we saw in April. If you just want steady income and don’t care much about price, then GPIQ and GPIX may be suitable investments due to their cost advantages and outperformance vs. peers.