Key Points
Coca-Cola has a lot to offer investors, such as a solid dividend yield.
The company is diversified, too, offering sodas, coffees, teas, and even water.
It’s somewhat recession- and tariff-resistant, too.
10 stocks we like better than Coca-Cola ›
So you’re thinking of investing in Coca-Cola (NYSE: KO). One of the great things about Coca-Cola is that I don’t have to introduce you to the company — you already know that it’s a titan in the beverage industry. Its business model is even better than most people realize — when it comes to its flagship drink, it doesn’t bother with bottling and distributing billions of bottles — instead it makes and sells the syrup and leaves most of the rest of the work to bottlers.
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Here’s a great green flag for Coca-Cola: It’s reasonably valued at recent levels, with a recent forward-looking price-to-earnings (P/E) ratio of 22.8 slightly below its five-year average of 23.3 and a price-to-sales ratio of 6.2 a smidge below its five-year average of 6.3.
Why might you invest in it, especially if you’re worried about the effect of tariffs and/or a possible recession? There are plenty of reasons to invest in Coca-Cola:
It’s somewhat tariff-resistant, with much of its business done locally around the world. And it’s ready to switch some packaging from aluminum to plastic if needed.
Its business is somewhat defensive, too: In an economic downturn, consumers might delay buying a new car or going on vacation, but they may still enjoy a relatively inexpensive treat such as a soda.
One of its competitive advantages is its powerful brand, ranked seventh in the world by Interbrand in 2024, with an estimated value of $61.2 billion.
It’s a dividend-paying stock, with a recent dividend yield of 3% — and it’s been hiking that payout for 63 consecutive years (though, admittedly, slowly). A 3% yield can help you keep up with inflation, and you can expect stock-price appreciation over the long run, too.
It’s diversified, with water, sports, coffee, and tea brands such as Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa, Georgia, Fuze Tea, and Gold Peak.
So give Coca-Cola some consideration for your long-term portfolio, especially if you’re looking for rather dependable income.
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Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
