Coca-Cola Is Up 5% Since Reporting Earnings. Here's Why It's Still an All-Star Stock to Buy and Hold.

Coca-Cola (NYSE: KO) needs little introduction, given that its namesake soda brand is one of the most recognized names on the planet. And the business is performing very well right now, despite industrywide headwinds in the consumer staples sector. Couple that with the company's incredible dividend track record, and it looks like an all-star stock, even though it isn't cheap right now. Here's why long-term dividend investors may want to buy it even at its current valuation.

Coca-Cola is a Dividend King

Right now, consumer staples companies are facing rising operating costs even as consumers are tightening their budgets. And, as if that weren't enough, buying habits are shifting toward healthier options. And still, Coca-Cola grew organic sales by a strong 7% in the third quarter of 2026. That's impressive execution and speaks to how well-run this beverage giant is.

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Looking over the long term, however, the best example of the company's execution is its dividend, which has been increased annually for 63 years. That makes Coca-Cola a Dividend King. And given the recent business strength, there's no reason to believe that incredible dividend streak is at any risk of ending. If you are a dividend investor who thinks in decades, Coca-Cola is a good stock to consider.

The only problem right now is valuation. After the 5% pop following third-quarter earnings, the stock's price-to-earnings ratio is up to 28x, which is a bit above its five-year average of 26x. You are, basically, paying full fare for a quality business. And while the 2.2% dividend yield is more than twice the market yield, you can find higher yields in the consumer staples space. What you aren't likely to find very easily are consumer staples stocks performing as well as Coca-Cola.

Coca-Cola is a long-term growth story

If you are looking at Coca-Cola as a short-term investment, it's fully priced, and you should probably consider other options at this point. However, if you are a long-term investor, the company's strong business performance amid today's headwinds underscores its attractiveness as a long-term holding. Sure, you could probably get a better entry price if you waited, but if you need to put some cash to work right now, Coca-Cola is a dividend all-star executing at the top of its game. It is hard to argue with that, especially when you add in the fact that consumer staples stocks in general tend to be resilient during market downturns.

Reuben Gregg Brewer 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.