Coca-Cola (NYSE:KO) has long been a cornerstone of Warren Buffett’s Berkshire Hathaway (NYSE:BRK.B) portfolio. First purchased in the late 1980s, this global beverage giant is a quintessential value investment. Known for its brand power and consistent dividend growth, Coca-Cola remains an attractive option for investors, especially as its stock is down 15% from recent highs.

Why Coca-Cola Stock Matters

Coca-Cola is one of the most recognizable brands worldwide, producing and distributing beverages under household names like Coke, Sprite, and Fanta. The Atlanta-based company, valued at $269 billion, ranks as the fourth-largest holding in Berkshire Hathaway’s equity portfolio, accounting for 8.5% of its assets.

Despite reaching a record high of $73.53 in September 2024, Coca-Cola stock has since retreated to offer a more compelling entry point. Currently yielding 3.10%, its quarterly dividend of $0.49 reflects a 60-year streak of consecutive increases, solidifying its status as a Dividend King.

Q3 Earnings Beat Estimates

Coca-Cola reported strong third-quarter results on October 23, 2024. Adjusted earnings per share (EPS) of $0.77 beat the $0.74 consensus estimate, while revenue of $11.85 billion exceeded the forecast of $11.61 billion. Organic revenue climbed 9%, driven by favorable pricing strategies, even as global unit case volume declined by 1%. Operating margins rose to 30.7%, and cash flow from operations reached $2.9 billion.

CEO James Quincey acknowledged inflation’s impact on consumer spending but remained confident in Coca-Cola’s growth strategy, updating full-year guidance to 10% organic revenue growth and 14%-15% non-GAAP EPS growth.

Is Now the Time to Buy Coca-Cola Stock?

Analysts are optimistic, assigning a “Strong Buy” rating with a mean price target of $74.52—offering a 19.3% upside. Trading at 21.93x forward earnings, Coca-Cola stock is discounted compared to its historical average multiple of 24.28x. For value-driven investors inspired by Buffett’s playbook, this dip presents a potential buying opportunity.

Coca-Cola’s enduring brand power, consistent dividend growth, and resilience through economic shifts make it a timeless investment, embodying the principles that have guided Buffett’s strategy for decades.

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