Coca-Cola Stock: 2 Reasons to Buy Like There's No Tomorrow

Coca-Cola has strong R&D, global reach, and a diversified portfolio. Its Q1 2025 organic sales growth was 6%, compared to 1.2% for PepsiCo. The company is a Dividend King with over six decades of annual dividend increases. Warren Buffett's Berkshire Hathaway owns around 400 million Coca-Cola shares, receiving $816 million annually in dividends. Despite strong performance, investors should consider if the stock is attractively priced.

Coca-Cola (NYSE: KO) has been a standout performer in the beverage sector, with impressive organic sales growth and a robust dividend history. The company's Q1 2025 organic sales growth of 6% outpaced its main competitor, PepsiCo (NYSE: PEP), which saw a growth rate of 1.2% [2]. Coca-Cola's global reach, strong research and development (R&D) capabilities, and diversified portfolio contribute to its industry leadership. Moreover, the company has maintained over six decades of annual dividend increases, solidifying its status as a Dividend King [1].

Warren Buffett's Berkshire Hathaway (NYSE: BRK.A, NYSE: BRK.B) holds around 400 million Coca-Cola shares, generating $816 million in annual dividends [1]. This significant investment by the Oracle of Omaha is a vote of confidence in Coca-Cola's long-term prospects. However, investors should consider whether the stock is attractively priced before making a decision to buy.

While Coca-Cola's dividend yield is currently around 2.9%, which is at the low end of its historical range, traditional valuation metrics such as price-to-sales, price-to-earnings, and price-to-book value ratios are near or above their five-year averages. This suggests that the stock may be fully priced or even slightly expensive [1]. Investors should be prepared to hold the stock for the long term to benefit from Coca-Cola's growth, as short-term gains may be limited due to the current valuation levels.

In contrast, PepsiCo is expected to report a 1.1% decrease in revenue for the quarter ending June 30, 2025, with earnings per share (EPS) expected to be $2.03 [2]. While PepsiCo has been performing well in recent quarters, Coca-Cola's stronger growth and dividend history make it an attractive investment option.

In conclusion, Coca-Cola's strong performance and dividend history make it an appealing investment for long-term investors. However, the stock's valuation levels suggest that investors should be prepared to hold the stock for the long term to benefit from its growth. As always, it is essential to conduct thorough research and consider your investment goals and risk tolerance before making any investment decisions.

References:
[1] https://finviz.com/news/104816/2-reasons-to-buy-coca-cola-stock-like-theres-no-tomorrow
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L8N3TC12D:0-pepsico-inc-expected-to-post-earnings-of-2-03-a-share-earnings-preview/