Coca-Cola Stock Is a Buy Thanks to Shelf Space and Habits

On lists of stocks to buy and hold forever, Coca-Cola (NYSE: KO) often makes the cut. One of the reasons cited is its increasing dividend payouts for 64 consecutive years, easily surpassing the requirement of increasing those payouts for at least 50 consecutive years to earn the title of Dividend King.

Another reason is its ability to generate billions in revenue while retaining billions in profits. For example, in its recent 2026 third-quarter earnings report, Coca-Cola reported $13.4 billion in revenue and $4 billion in net income. Finally, another reason is that it's a business that has stood the test of time, with its first drink being poured in the state of Georgia on May 8, 1886.

That said, while all those reasons are valid, there are two attributes Coca-Cola offers that aren't highlighted enough. As uncertainty could swirl around the markets in 2027 just as it did in 2026, the iconic beverage maker is a stock worthy of consideration before the new year begins.

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Coca-Cola's quiet strengths

Coca-Cola has a shelf-space moat, one of its biggest strengths. Walk down the soda aisle in a grocery store or go to the drink section in a gas station, and you're more than likely to see Coca-Cola, Sprite, Barq's Root Beer, and Fanta sodas. But not only that, you're going to see different flavor variations and diet and zero-sugar options surrounding the traditional flavors.

If you're looking for water or a sports drink, you'll also find Coca-Cola's brands: Dasani, Smartwater, Powerade, and Bodyarmor. If you're looking for something outside of soda, water, and sports drinks, its offerings also include Minute Maid and Golden Peak Tea.

Having that kind of presence is a competitive advantage that forms a moat, as an entrepreneur can't just dream up a beverage company and immediately gain that kind of shelf space. And thanks to that shelf space, it's created Coca-Cola's other strength: habit creation.

The defensive play

There isn't quite a pure recession-proof stock, as all companies, no matter how strong, will feel the effects of an economic downturn to some extent.

That said, there are recession-resistant stocks that can hold steady and even perform respectably during a downturn. Coca-Cola is one of those recession-resistant stocks, thanks to the availability of its products, which lends itself to creating customer habits of filling up a grocery cart weekly with its beverages or reaching for a soda, water, or sports drink at a convenience store during a pit stop on a road trip.

Its products are not a necessity, but even as people tighten their budgets, there are just some things they aren't willing to give up. Coca-Cola's offerings can fall into that category. But recognizing that budgets are getting tighter, the beverage maker is shifting to offering different product sizes at different price points to avoid losing its base. In January, Coca-Cola started selling different soda brands in single-serve mini cans at convenience stores. With a suggested retail price of $1.29, that perfectly matches cost-conscious consumers.

What to expect in 2027

Overall, analysts have a generally favorable outlook for Coca-Cola. According to CNN-tracked data, 28 analysts cover the stock, and 71% rate it a buy, 25% a hold, and 4% a sell.

For what may be ahead over the next year, of those analysts, the median one-year price target is $100, which, at the price as of this writing of $94.55, would represent a gain of 5.7%. The group's highest target, $106, would represent a 12.1% gain, while the lowest target, $5.70, would represent a 6.9% decline.

Those lower price targets may come as a surprise to some, as KO shares have shot up 35% so far in 2026, compared with the S&P 500's 10.5% return over the same period. Those conservative price targets, however, seem warranted, as Coca-Cola has not typically been known for outperforming the broader market. What those recent gains speak to more is the market's recognition in 2026 of the value the beverage maker provides amid stubborn inflation, potential interest rate hikes, elevated energy prices, and a handful of other issues.

Still, even if the stock price doesn't perform as well in 2027, this is a company you can buy and hold without having to worry to the same extent as you would with an artificial intelligence stock. And not only that, Coca-Cola will keep paying you and keep boosting that payout as long as it sits in your portfolio.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.