Can Coca-Cola Stock Help Keep Your Money Safe During a Market Crash?

The stock market is in turmoil right now, and entering this week, the S&P 500 has declined by around 9% since the start of the year. For many investors, especially retirees, capital preservation has been top of mind. How can you keep your savings safe and still be invested in the stock market -- or is that even possible nowadays?

One blue chip stock you may be considering is Coca-Cola (NYSE: KO). The beverage company is known for its robust results and resiliency over the years. Can it be a good investment right now and be a way to help keep your portfolio safe?

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Why Coca-Cola may be in a good position to weather the storm

A huge advantage Coca-Cola has over other businesses is that it operates all over the world. That gives it flexibility. For example, President Donald Trump recently announced tariffs on steel and aluminum imports. But Coca-Cola CEO James Quincey said that the company could adjust and use other packaging materials, such as plastic, to minimize the impact of those tariffs.

The company also has strong margins. Last year, Coca-Cola reported $10.6 billion in earnings on sales totaling $47.1 billion, which equates to a profit margin of nearly 23%. Even if there's an increase in costs, the company's strong profit margins put it in an excellent position to continue delivering solid earnings numbers. Coca-Cola, however, hasn't been a fast-growing business recently; from 2022 through 2024, its earnings grew by just 9%.

The stock outperformed in the last market crash

The last time the stock market was in a prolonged free fall was 2022. Growth stocks cratered amid concerns about rising inflation. Coca-Cola stock, however, proved to be a fairly safe investment at the time. Including its dividend, the stock's total returns were more than 10%, far better than the S&P 500's.

^SPX data by YCharts

Historically, Coca-Cola has been a low-volatility stock to own, as it has averaged a beta of 0.45, indicating that it doesn't follow the market's swings. For investors seeking safety right now, that can make this an attractive investment. But it's important to remember that the past doesn't predict the future, and while Coca-Cola was able to pass on rising costs to consumers amid high inflation in recent years, it may not be as easy to do that now with many consumers feeling stretched.

Is Coca-Cola stock a good option for risk-averse investors?

Coca-Cola stock can be a good place to park your money right now. If you just want to collect a good, safe dividend, this can be one of the better investments to consider putting in your portfolio today. Coca-Cola's business is rock solid and isn't going anywhere. It provides a dividend that yields 2.9% and can generate a lot of recurring income for you.

The only downside is that its growth prospects may not be all that strong, but this could still be an ideal stock to own if you're looking to keep your risk low and want some stable dividends.

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

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David Jagielski 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.