Coca-Cola (KO +1.41%) is a household name that consumers are all too familiar with. Investors know the business as a favorite Warren Buffett holding. It has had a stranglehold on its industry for decades. The beverage stock has generated a total return of 69% in the past five years (as of Jan. 20).
Peloton Interactive (PTON 0.43%) doesn't have the recognition of Coca-Cola. However, this fitness innovator made a name for itself disrupting the at-home exercise market. This consumer discretionary stock has fallen 96% in the past five years, though, thanks to the challenges it has faced.
Is Coca-Cola or Peloton the best stock to buy right now?
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Coca-Cola's impressive brand strength supports its lasting success
NYSE: KO
Key Data Points
Coca-Cola has been a successful company for a long time. It dominates the non-alcoholic ready-to-drink industry, with more than 200 beverage varieties, a presence in 200 countries and territories, and 2.2 billion services of its products consumed every single day. There aren't many businesses that have this type of adoption and reach.
Credit goes to the brand, which supports Coca-Cola's economic moat. Consumers across the world have developed an affinity to their favorable beverages, giving the company a loyal customer base. The brand drives pricing power, which had a 4% positive impact in Q3 2025 (ended Sept. 26).
Profits are impressive. A key part of Coca-Cola's strategy is to use bottling and distribution partners to handle the capital-intensive activities. This results in high profit margins.
Since these beverages are small and repeat purchases, Coca-Cola's business is somewhat predictable. And this makes it a relatively safe portfolio holding. Demand is always there, regardless of economic conditions. The lack of dramatic sales fluctuations means investors don't have to think much about changing macro factors that impact many other businesses.
Dividend investors will love this stock too. Coca-Cola is a Dividend King, having raised its payout in 63 straight years. This steak is still active (2026 will be the 64th year).
Peloton's declining revenue is a worrying trend
NASDAQ: PTON
Key Data Points
Peloton was once a darling on Wall Street, as the business was registering tremendous growth. Its tech-forward stationary bikes and treadmills were seeing huge demand before the COVID-19 pandemic. And the health crisis provided a boost. That's because people spent more time at home, gyms were closed, and they needed a way to get their workouts in.
After the economy opened back up, Peloton started to struggle. Sales of its expensive equipment tanked. This segment's revenue totaled $152.4 million in Q1 2026 (ended Sept. 30), down 75% from the same period five years ago. The connected fitness subscriber base (customers that own a piece of hardware) declined 6% year over year in the third quarter to 2.7 million. The company continues to shrink, as it's clearly having a hard time getting back to growth.
The bright spot is the focus on subscription revenue, which represented 72% of the company's total in Q3. This segment carries a stellar gross margin of 68.6%. Combined with extensive cost cuts, Peloton is now reporting positive GAAP net income. The question now is whether that figure can increase in the years ahead.
The valuation reflects the market's downbeat view. Shares trade at a historically cheap price-to-sales ratio of 1.
Investors should play it safe
Coca-Cola won't crush the market. Shares have dramatically underperformed the S&P 500 index in the past decade. However, it's a solid stock pick for investors who appreciate consistent income. And it's the better investment opportunity of these two businesses.
That said, investors with a much higher risk tolerance and a longer time horizon might be willing to gamble on Peloton. That's not the perspective I have. But as part of a well-diversified portfolio, maybe there's room to take that chance.
