1 Reason Why Now Is the Time to Buy Coca-Cola

Key Points

• Coca-Cola is a consumer staples giant and a Dividend King.

• The stock offers an attractive 3% yield and, after a stock pullback, its valuation is reasonable, too.

• 10 stocks we like better than Coca-Cola ›

Coca-Cola (NYSE: KO) is one of the largest consumer staples companies in the world. It has the scale, marketing power, distribution might, and innovation chops to compete with any peer. It is also a Dividend King -- a group of companies that have raised dividends for 50+ consecutive years -- showing that it has a consistent business and places a high value on returning value to investors. There's just one issue that investors need to worry about -- buying the stock at a reasonable price.

Coca-Cola's not on sale, but it isn't overpriced

Coca-Cola is an attractive business, but it isn't always an attractive stock. That's largely because the business' many strengths are so widely recognized. But there are some unique headwinds right now that have investors worried. Most notably there's a shift toward more health consciousness among consumers that has Wall Street concerned that demand for Coca-Cola's many sweet beverages is going to be a problem.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

That's not unreasonable, noting that organic growth of 5% in the second quarter was down from 6% in the first quarter. But the truth is that 5% organic growth isn't bad and was well above the 2.1% growth of peer PepsiCo in the second quarter. All in all, Coca-Cola is doing just fine as a business and, if history is any guide, the Dividend King will adjust as needed to best serve consumers.

This is where a recent stock price pullback comes in, because the drop has left key valuation metrics price-to-sales and price-to-earnings below their five-year averages. Is the stock dirt cheap? No, but if you are a long-term dividend investor, the shares are attractively valued, which is one very good reason to jump aboard this iconic soda maker and its 3% dividend yield.

Should you invest $1,000 in Coca-Cola right now?

Before you buy stock in Coca-Cola, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Coca-Cola wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,872!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,092,280!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 189% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 22, 2025

Reuben Gregg Brewer has positions in PepsiCo. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.