2 Reasons to Buy Coca-Cola Stock Like There's No Tomorrow

Coca-Cola (NYSE: KO) is a name people around the world recognize, thanks to the company's dominance in the global non-alcoholic drinks market. From the eponymous Coca-Cola to other sparkling beverages, juices, waters, and more, the company has built an empire that's delivered steady earnings growth over the years.

And this has translated into performance for the stock, with a 50% gain over the past five years. Of course, this may seem like a lackluster performance if we compare it to some of the most popular tech stocks that have climbed in the triple digits in less than a year. But it's important to keep in mind that Coca-Cola offers you a certain sense of security, making it an excellent stock to hold onto for the long term. One of the world's most famous investors has made that bet. I'm talking about Warren Buffett, who purchased shares in the late 1980s and has held on ever since.

And speaking of the famous billionaire and former chief executive officer of Berkshire Hathaway, he likely would support the following reasons for buying the stock -- because these particular elements are key to his investing strategy. Let's check out these two reasons to buy Coca-Cola stock like there's no tomorrow.

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1. Coca-Cola has a fantastic moat

Even companies with a wonderful product must worry about the following: competition. It can take down even the most successful company or product, and that's why a player that aims to win over the long term must have a solid moat. This means a competitive advantage, and it can come in many forms -- from a strong brand to difficult-to-beat partnerships and logistics.

Two major moats for Coca-Cola are its brand strength and the business model of concentrate operations and finished product operations. Regarding brand, Coca-Cola has the name recognition that results in people going to a restaurant and asking for "a Coke" rather than a cola beverage. When consumers want such a drink, the first name that comes to mind generally is Coca-Cola.

Another element that keeps Coca-Cola in the lead is the company's manner of selling its products -- it offers them as the finished products we know well, and it also sells beverage concentrates to bottling partners worldwide that go on to sell finished products to retailers. Though finished products generally deliver stronger net operating revenue, concentrate operations favor higher profit margins -- this strikes a great balance for the company, and helps keep it closer to customers and their tastes in every region.

2. Coca-Cola has proven its commitment to rewarding shareholders

Investors looking for passive income often flock to Coca-Cola, and this is due to its long-standing commitment to sharing its successes with shareholders. The company is a Dividend King, meaning it's increased its dividend for more than 50 straight years.

Last February, the Coca-Cola board approved the company's 63rd consecutive annual dividend increase. Today, the beverage giant pays a dividend of $2.04, representing a dividend yield of 2.7%. That's higher than the S&P 500 dividend yield of 1.1%.

When a company commits to dividend growth for so many years, there's reason to be confident the trend will continue. This is because it shows that rewarding shareholders is a key part of the company's strategy. It's also important to note that Coca-Cola's high levels of free cash flow over time mean that it has the financial capacity to keep paying out dividends and regularly increasing payments.

Today, the S&P 500 continues to roar higher, but investors have worried about when the momentum may slow. When this eventually happens, as markets don't advance nonstop forever, dividend stocks may limit the impact on investors' portfolios. And in times of market strength, dividend stocks offer you an additional lift. That's why Coca-Cola stock is one to buy like there's no tomorrow, as it may score a win for you in any market environment.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.