The year 2022 has been a brutal one so far for most stocks. The Dow Jones Industrial Average is down 20% through mid-October, and many of its members have declined by more than 30%.

But Coca-Cola (KO 0.02%) stock has avoided that wreckage. The beverage giant's shares trounced the market in 2022 and are up slightly over the past 12 months. These gains make Coke one of the best-performing members of the Dow so far.

That bullish attitude will be tested when the company announces its latest operating results in a few days. Let's take a closer look at why investors are feeling confident heading into that report.

Set up for success

Coke's business appears to be tailor-made for today's rocky selling environment. Sure, consumers are pulling back spending in areas like e-commerce and digital entertainment. But they are traveling and dining out more, and that on-the-go trend is where Coke shines.

Organic sales were up a blazing 17% through the six months that ended in early July, the company said. And if PepsiCo's more recent announcement is any indication, those trends might have improved. Pepsi said on Oct. 12 that beverage volumes rose a healthy 3% through early September even as prices soared. Coke might sound a similarly positive tone in its upcoming report on Oct. 25.

Better than average

Coke has a few assets that PepsiCo lacks, too. Its business is more focused on the on-the-go beverage niche that is booming today as consumers prioritize experiences such as travel. That focus ensured that Coke's sales were hit harder in the early phases of the pandemic but is supporting a sharp rebound today.

PEP Operating Margin (TTM) Chart

PEP Operating Margin (TTM) data by YCharts.

The company is also incredibly profitable. Operating profit margin held above 30% of sales in Q2, for example, or about double PepsiCo's level. That success reflects Coke's massive global sales footprint, its large supply chain infrastructure, and its pricing power. Continued gains here should allow Coke to generate strong earnings even if demand trends slow down .

Bright outlook

Wall Street isn't expecting such a slowdown, though. PepsiCo just raised its outlook after its beverage business posted accelerating sales gains. Executives said they aren't seeing any hint of weaker demand, even after rolling out modest price increases.

Of course, that all could change at any time, especially if inflation persists and economic growth slows further in key markets like the U.S. and China. But Coke investors don't particularly fear recession, either. The Dividend King has raised its annual payout in each of the last 60 years, making it a near certainty that it will boost its dividend again in 2023, even if a recession strikes.

The combination of income, market-beating growth, and industry-leading profitability helps support good returns for investors who hold this stock. That's true in any market, but Coke's allure is even stronger at times like these when the economic outlook is cloudy.

While we can't know what the next few quarters will look like for consumer spending, we can be confident that Coke will continue to dominate the global beverage industry. That's an excellent reason to put the stock on your watchlist today.