Coca-Cola is a globally recognized brand, leading the world in non-alcoholic beverages. The company, known for its iconic Coca-Cola drink, also offers a wide range of other drinks like sparkling beverages, juices, and water, and has consistently grown its profits over time.
The stock has performed well, increasing by 50% over the last five years. While that growth might not seem as impressive as some fast-growing tech stocks, Coca-Cola provides a level of stability that makes it a good long-term investment. In fact, Warren Buffett has believed in this stability for decades, first buying shares in the late 1980s and continuing to hold them ever since.
Warren Buffett, the well-known investor and former CEO of Berkshire Hathaway, would probably agree with these reasons to buy Coca-Cola stock. They align with his core investment principles. Here are two compelling reasons to consider investing in Coca-Cola.
1. Coca-Cola has a fantastic moat
Even great products aren’t safe from competition. A strong competitor can disrupt even the most successful businesses, so long-term success requires a lasting advantage – often called a ‘moat.’ This advantage can take many forms, like a well-known brand, strong relationships with partners, or efficient operations.
Coca-Cola benefits from two key strengths: its powerful brand and its unique business model. Because of its strong brand recognition, people often specifically ask for “Coke” when they want a cola drink – it’s the first brand that comes to mind for many consumers.
Coca-Cola maintains its leading position, in part, through how it sells its products. It both sells finished beverages directly and provides concentrates to bottling companies around the world, who then produce and sell the drinks. While selling finished products generates more overall revenue, the concentrate business is more profitable. This combination gives Coca-Cola a strong financial position and allows it to adapt to local preferences in different regions.
2. Coca-Cola has proven its commitment to rewarding shareholders
Coca-Cola is a popular choice for investors seeking regular income. This is because the company consistently rewards its shareholders, having increased its dividend payout for over 50 years – earning it the title of a Dividend King.
Coca-Cola recently announced its 63rd year in a row of increasing its dividend payments to shareholders. Currently, the company pays a dividend of $2.04 per share, which gives investors a 2.7% return on their investment. This is a stronger return than the average dividend yield of companies in the S&P 500, which is 1.1%.
If a company consistently increases its dividends over many years, it’s a good sign that it will likely continue to do so. This demonstrates a commitment to returning value to shareholders as a core part of its business strategy. Coca-Cola, in particular, generates a lot of cash, which gives it the financial strength to not only maintain its dividend payments but also to increase them consistently.
The S&P 500 is still climbing, but investors are starting to wonder when that growth will slow down. When the market eventually stops going up – which it always does – stocks that pay dividends can help cushion the impact on your investments. Plus, these dividend stocks can actually boost your returns when the market is doing well. That’s why Coca-Cola is a great stock to consider – it could perform well no matter what the market is doing.
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2026-01-30 10:25