Is it feasible to buy high-dividend stocks at appropriate prices solely to collect dividends?

Recently, Warren Buffett’s annual letter to shareholders was released, sparking widespread market discussion. One point that left a strong impression on me was Buffett’s illustration of his investment ‘secret weapon’—dividends plus time—using the examples of Coca-Cola and American Express: namely, long-term, sustainable dividend income. Coca-Cola, one of Buffett’s most iconic and widely recognized investment cases, has traditionally drawn attention for its brand strength, outstanding business model, and the extraordinary returns generated by long-term holding. This article, however, re-examines this investment primarily from the perspective of dividend distributions. 1. Dividends are a critical source of stock returns If a friend who has never bought stocks before asks you how one makes money investing in stocks, how would you answer? Many people would likely say, “Naturally, you profit from stock price appreciation—the rise in share price means you’ve made money.” Is this statement correct? I’d say yes—but only partially. In fact, stock returns consist of two components: capital gains (price appreciation) and cash dividends paid by the company. Expressed as a formula: Stock Return = Price Change (%) + Dividend Income. In the mature U.S. capital markets, dividends are a highly valued metric among investors, and corporate dividend payouts have long become a standard practice for returning value to shareholders. Some outstanding U.S.-listed companies consistently pay quarterly dividends—even borrowing funds to repurchase shares and distribute dividends. For example, DuPont has paid quarterly cash dividends without interruption for over 100 years since its first cash dividend in 1904, making dividends one of investors’ most stable income sources. By contrast, China’s A-share market is relatively young, and related regulations remain underdeveloped; as a result, many corporate owners treat the stock market merely as a fundraising channel, with few companies willing to distribute profits to shareholders. Consequently, many domestic investors overlook dividend income altogether. However, as regulatory policies governing A-share dividend distributions continue to evolve and improve, an increasing number of high-quality Chinese companies have begun delivering consistent dividends to investors—such as Kweichow Moutai, Gree Electric, China Shenhua, and Yili Group—all of which maintain long-standing, stable dividend records. 2. Retrospective analysis of the Coca-Cola investment case A global stock market crash erupted in October 1987, dragging down even high-quality stocks across the board. Coca-Cola—long watched by Buffett—also suffered a sharp decline, falling from a peak of around $53 to $29 before rebounding. Buffett began purchasing Coca-Cola shares at the end of 1988, acquiring 14.17 million shares at $42 per share (P/E ratio ~30x). In 1989, he bought another 9.18 million shares at $47 per share (P/E ratio ~19x). Several years later, in 1994, he added another 6.6 million shares, bringing his total holdings to exactly 100 million shares. With that, Buffett concluded his entire Coca-Cola investment, totaling $1.3 billion. This Coca-Cola investment coincided with Buffett’s investment prime. By then, he had fully overcome the psychological constraints of his earlier “cigar-butt” investing approach and had mastered the strategy of buying exceptional businesses at reasonable valuations—focusing squarely on their future capacity to generate free cash flow. Within ten years after Buffett’s initial purchase in 1988, Coca-Cola’s stock experienced explosive growth: by mid-1998, its share price had surged 13-fold, and its P/E ratio reached an all-time high of 50x.

DuPont in the context of economic transformation: new consumption + minimalism (‘danshari’)

If our analysis has inspired you, please show your support with a like. If you find it valuable, please share it with more friends. We welcome your comments or private messages—we look forward to in-depth discussions with you. Thank you for your attention and support! I. Financial Report Overview DuPont (DD) issued a press release on February 8, 2022, announcing its fourth-quarter and full-year 2021 financial results, along with its first-quarter 2022 dividend announcement. The report stated: “Net sales for Q4 2021 totaled $4.3 billion, up 14% year-on-year; organic sales rose 13% year-on-year.” DuPont also announced: “The regular quarterly dividend will increase by 10%, and the Board has approved a $1 billion share repurchase program.” On the first trading day following the earnings release, DuPont’s stock rose 6.32%. II. Financial Data 1. Net Sales ・ Net sales for Q4 2021 amounted to $4.271 billion, up 14% year-on-year; organic sales increased 13% year-on-year. ・ Full-year 2021 net sales totaled $16.653 billion, up 16% year-on-year; organic sales rose 14% year-on-year. ・ From 2020 to 2021, DuPont’s major business segments contributed relatively balanced shares of total net sales, meaning the company’s overall operations were not significantly disrupted by unexpected events in any single segment. ・ Asia-Pacific region organic sales accounted for 48% of DuPont’s total organic sales; thus, corporate revenue will be influenced, to some extent, by economic developments in the Asia-Pacific region. 2. Profitability ・ Income from continuing operations for Q4 2021 stood at $266 million, up 18% year-on-year; full-year 2021 income from continuing operations totaled $1.804 billion, up 175% year-on-year. ・ Net income for Q4 2021 was $447 million, up 14% year-on-year; full-year 2021 net income reached $6.545 billion, up 323% year-on-year. ・ Diluted earnings per share (EPS) from continuing operations for Q4 2021 were $0.60, up 22% year-on-year; GAAP diluted EPS from continuing operations for full-year 2021 were $3.23, up 198% year-on-year. 3. Balance Sheet ・ As of December 31, 2021, DuPont’s debt-to-asset ratio stood at 41%, down 4 percentage points year-on-year; total assets declined 36% year-on-year.

DuPont Declares $0.60 Quarterly Dividend

Oct 13, 2026

DuPont announced a quarterly dividend of $0.60 per share payable on December 15, 2026. Shareholders of record as of November 30, 2026, will receive the payment.

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