Coca-Cola (KO +0.35%) is older than clothing zippers, airplanes, and sliced bread. The company, now 134 years old, continues to dominate the beverage space and remain relevant worldwide. There are several good reasons to buy Coca-Cola stock right now, and surprisingly, our love of a fizzy beverage isn't one of them.
NYSE: KO
Key Data Points
Reinvigorated by new leadership
Chief Operating Officer Henrique Braun will become the company's CEO on March 31. Coca-Cola also created a new executive position, the Chief Digital Officer. This role will be held by Sedef Salıngan Şahin, who will focus on how the digital strategy can "strengthen execution, simplify how we work and enable us to deliver for consumers with greater precision and speed," according to Braun in a January press release.
These changes in operational leadership should help Coca-Cola stay current in a fast-paced consumer landscape. It may also reinvigorate the company's growth trajectory as it shakes up its digital strategy.
Coca-Cola remains one of the strongest brands in the world
Coca-Cola and its products are ubiquitous worldwide. Its products command premium shelf space and have maintained customer loyalty not just for a few years, but for generations. Brand power is its most important competitive advantage.
It isn't just a soda company. Coca-Cola's portfolio includes sports beverages, energy drinks, bottled water, coffee, and tea. If you're drinking anything other than tap water, you've likely consumed a Coca-Cola product recently. Its diversified portfolio is an important aspect of the company's ability to navigate changes in consumer behavior.
Coca-Cola is a Dividend King
A Dividend King is defined as a company that has paid dividends for at least 50 consecutive years. Coca-Cola is well into its sixth decade of dividends and now pays $0.51 per share quarterly. The company has also steadily increased its dividend for several decades. For income investors, Coca-Cola is elite and reliable.
It has excellent free cash flow
Why is Coca-Cola's strong free cash flow important? Not only does it fund the consistent dividend, but it also enables Coca-Cola to continue expanding through strategic acquisitions. Coca-Cola isn't a high-growth company, but it does maintain a position to acquire brands it believes will add meaningful shareholder value. The acquisitions aren't frequent, but they are impactful.
Image source: Getty Images.
KO is a strong defensive stock
Coca-Cola will provide your stock portfolio with lower volatility than most during uncertain economic times. Its current beta is just 0.36; this means that as volatility increases, Coca-Cola isn't as affected by it. The beverage behemoth is also resilient during economic downturns, as its 100-plus-year history proves.
Buy Coca-Cola stock for total return
Consistent dividends, share repurchases, and steady long-term growth make Coca-Cola an excellent choice for investors who prioritize total returns. For 2026, Coca-Cola expects to grow 4% to 5%. This level of growth isn't anything to write home about, but it is exactly what the company's investors have come to expect.
Mid-single-digit growth combined with dependable income is why Coca-Cola's stock is a foundational holding in any long-term equity portfolio.
