Investors may often choose stocks simply because a respected investor such as Warren Buffett owns them. In some cases, deciding that "if you can't beat 'em, join 'em" is a strategy with merit.

However, the risk is that those well-known investors may have made their purchases under conditions that no longer apply. Moreover, all investors, Buffett included, make mistakes. Hence, one should not hesitate to heed solid analyses, even if a top-performing investor may disagree.

Doing that might keep investors away from these three Warren Buffett investments today: Coca-Cola (KO), Paramount Global (PARA -2.22%), and Kraft Heinz (KHC -0.55%). Let's see why.

Coca-Cola

Calling Coca-Cola a "stock to avoid" may seem counterintuitive. It's one of the most recognized brands in the world, and it has become one of Buffett's more notable investments.

And admittedly, Buffett's team at Berkshire Hathaway should probably continue to hold this stock. With its annual dividend now at $1.84 per share, Berkshire will receive $736 million this year alone on its original $1.3 billion investment.

Nonetheless, the fact that Buffett's team has not bought any Coca-Cola stock since 1994 indicates it is more of a hold than a buy. Its price-to-earnings ratio of 27 looks a bit pricey considering that its profit growth is typically in the single-digit percentages.

Additionally, it has raised its dividend for 61 straight years. That has undoubtedly benefited Buffett, and even new investors might like the 3% dividend yield it offers at current share prices.

Still, its free cash flow -- from which it would normally cover its dividend outlays -- turned negative in the first quarter of 2023. And even in 2022, its dividend payments of $7.6 billion claimed 80% of the company's $9.5 billion in free cash flow. That left little cash for stock repurchases or investments in the company.

Coca-Cola is unlikely to end its streak of dividend hikes, but unless it can significantly raise free cash flow, the company probably faces stagnation and, eventually, slowing growth in the payout.

Paramount Global

Like other media companies, Paramount is in the midst of a transition as viewership switches from traditional linear television to streaming services. In a way, Paramount is fortunate as Paramount+ continues to grow in popularity. Subscriptions rose by 4 million in Q1 alone. 

Unfortunately for Paramount, streaming services do not generate as much revenue as traditional television, and with numerous streaming services now available, Paramount+ faces intense competition.

Moreover, content development remains an expensive activity. With so many options for entertainment, visits to the movie theater may never return to pre-pandemic levels, placing more pressure on this segment of Paramount Global's business.

Those financial strains likely led to the company's recent dividend cut. Until recently, its annual payout was $0.96 per share, which would have amounted to a 6% dividend yield at today's share price. But the company slashed its yearly payout by 79% to $0.20 per share. This took the yield to 1.3%, below the S&P 500's average yield of 1.6%.

Buffett regarded this decision as "not good news," and one has to wonder if he has changed his mind about Paramount Global. Given this lower payout and the current competitive landscape in the industry, one should err on the side of caution and avoid this media stock.

Kraft Heinz

Buffett began his investment in this company by purchasing Kraft Foods and then helping to engineer its merger with Heinz.

Over time, this has become one of his more notable underperformers, and Buffett acknowledged mistakes, later saying he paid too much for Kraft. About the time of that admission in early 2019, the packaged food giant took a $15.4 billion write-down on the values of its Kraft and Oscar Mayer brands.

It also cut the dividend to $1.60 per share annually, the level where it remains today. But even though that amounts to a yield of 4.5% at the current stock price, it seems also to highlight why Kraft Heinz is still a stock to avoid.

Also, despite the cut, its free cash flows appear increasingly unable to cover the dividend. In Q1, free cash flow of $220 million did not cover the $491 million dividend outlay. The same thing happened in 2022, when its $1.6 billion in free cash flow was less than the $2 billion needed to pay dividends.

Additionally, Kraft Heinz holds $43 billion in intangible assets. This could set the food stock up for another multibillion-dollar write-down, similar to the one in 2019. Given that situation and the high cost of its dividend, Kraft Heinz stock does not look like it has finished falling.