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If Warren Buffett were reflecting on the current state of his investments, a broad smile would likely be in order. Despite the challenges faced by the overall stock market this year, Buffett’s esteemed Berkshire Hathaway has achieved an outstanding gain of about 17%.
Among the standout performers in Berkshire’s portfolio this year is The Coca-Cola Company (KO -1.62%), which has seen a near 10% increase year to date. This raises the question: Is Coca-Cola the top Buffett stock to consider buying at this moment?
The Rise of Coca-Cola Stock
Coca-Cola’s ability to weather market fluctuations might be attributed to statements made by CEO James Quincey during the company’s announcement of its fourth-quarter results in February. Quincey noted, “Our all-weather strategy is working, and we continue to demonstrate our ability to lead through dynamic external environments.”
This reference to an “all-weather strategy” signifies Coca-Cola’s commitment to business growth regardless of external economic conditions, and the results validate Quincey’s assertion.
The company reported fourth-quarter net revenues of $11.5 billion, marking a 6% increase compared to the previous year. Earnings per share also saw a robust 12% year-over-year increase on both GAAP and adjusted bases. Furthermore, Coca-Cola’s operating margin improved to 23.5%, up from 21% in the same quarter last year.
Importantly, much of Coca-Cola’s outperformance can be linked to its status as a perceived safe haven in the market. Many consumer staples stocks hold this reputation, but Coca-Cola stands out with a legacy dating back to 1886 and boasts one of the most recognized brands globally, making it a top choice for investors seeking stability amidst market volatility.
Exploring Other Strong Options
While Coca-Cola’s performance and safety attributes are significant, they do not automatically crown it as the best Buffett stock to purchase right now. Several other contenders warrant consideration.
Berkshire Hathaway itself has outperformed Coca-Cola in 2025, and Buffett has strategically built a substantial cash reserve that he can leverage to acquire valuable stocks at reduced prices if market declines continue.
Furthermore, BYD, a Chinese electric vehicle manufacturer, has emerged as Buffett’s most significant winner this year, with its stock surging nearly 50%, mainly driven by excitement around new self-driving technologies.
Other Buffett-affiliated stocks also surpassed Coca-Cola’s performance recently, such as the two Japanese trading firms that Buffett holds in high regard: Marubeni and Sumitomo. Additionally, changing market dynamics have benefited Latin American fintech company Nu Holdings, telecommunications leader T-Mobile, and the internet services firm VeriSign, all of which have outperformed Coca-Cola this year.
Assessing Coca-Cola’s Value as an Investment
With strong competition in the investment landscape, one might ponder whether Coca-Cola is the ideal choice within Buffett’s holdings at present. The answer may hinge on individual investment approaches.
For growth investors, Coca-Cola may not be the optimal selection. These investors might find greater opportunities with BYD’s phenomenal rise or seize on Amazon‘s recent price dip to acquire shares in the e-commerce and cloud computing giant.
Value investors should consider looking elsewhere in Buffett’s portfolio as well. Coca-Cola’s forward earnings ratio hovers around 23.6, which is not prohibitively expensive but does not present itself as a bargain either.
Conversely, Coca-Cola might be an excellent choice for income-focused investors. The company offers a forward dividend yield just shy of 3% along with a remarkable history of 63 consecutive years of dividend increases, making it a standout in Buffett’s investment roster.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, sits on the board of directors for The Motley Fool. Keith Speights holds investments in Amazon and Berkshire Hathaway. The Motley Fool maintains positions in and endorses Amazon, Berkshire Hathaway, and VeriSign, and recommends BYD Company, Nu Holdings, and T-Mobile US. The Motley Fool has a disclosure policy.
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