Coca-Cola (KO +0.00%) is an iconic business and even some of the most notable investors happily own the shares. That list famously includes Warren Buffett, the CEO of Berkshire Hathaway. There are two very good reasons to buy the stock today, but there's also a reason to wait until a future tomorrow.
Here's what you need to know before you jump aboard.
1. Coca-Cola is a well-run business
Coca-Cola is a consumer staples maker since it, technically, produces food. The many beverages it produces are effectively a luxury version of a basic necessity. But the cost of that luxury is so modest that customers are happy to buy sodas and other beverages regardless of the economic environment. That's a very big-picture view of the business.
Image source: Getty Images.
The problem with the big picture is that it applies to a lot of other consumer staples makers. But Coca-Cola has achieved a scale that few can match. It operates globally and has a brand that is revered across all of the markets it serves. The company's distribution network is large, diverse, and industry-leading. Its marketing team can stand toe to toe with any competitor. And it has the cash to lean into both internal research and development and acquisitions to keep its brand portfolio up to date.
The biggest proof of Coca-Cola's business model, however, is probably its dividend. The company has increased its dividend annually for more than 50 consecutive years, making it a Dividend King. It is impossible to build a record like that without having a strong business model that gets executed well in both good markets and bad ones. If you like owning great businesses, Coca-Cola should be on your short list.
2. Coca-Cola is doing well right now
The interesting thing is that right now is a bad time for consumer staples companies. For example, Coca-Cola's largest beverage competitor, PepsiCo, is struggling. PepsiCo's organic sales growth in the first quarter of 2025 was a tiny 1.2%. Coca-Cola was able to increase its organic sales by 6%. That's a massive difference and shows that Coca-Cola is doing quite well right now.
If you like to own industry leading companies that are performing at the top of their games, you'll probably find Coca-Cola very attractive. And you'll collect an above-market yield of 2.8% if you do decide to buy it. That's hard to complain about.
NYSE: KO
Key Data Points
The problem with buying Coca-Cola today
There's just one small problem today and that's valuation. Coca-Cola's price-to-sales, price-to-earnings, and price-to-book value ratios are all above their five-year averages. And while the 2.8% dividend yield is attractive relative to the S&P 500 index (^GSPC +0.84%), it is actually toward the low end of the stock's own yield range over the past decade.
Which brings up an interesting point: Warren Buffett has owned Coca-Cola for decades. He is not buying it right now. That would probably please Buffett's mentor Benjamin Graham, a value investor who often commented that even a good company can be a bad investment if you pay too much for it. For investors who care about valuation, Coca-Cola is likely to be a stock to wait on rather than one to buy at any price.
Buying Coca-Cola wouldn't be a mistake, but the timing could be better
At the end of the day, Coca-Cola is a great business and it would be hard to suggest that buying today is a huge mistake. It would be more accurate to say that patient investors can probably do better if they watch for a drawdown. The fact is that the big reason to buy Coca-Cola, its strong business, isn't likely to change anytime soon. But the strong performance that is drawing Wall Street to the shares today might and that would be the best time for opportunistic long-term investors to jump aboard.
