There's plenty of pop in shares of Coca-Cola (KO -0.83%) these days. The pop star is trading 26% higher this year, near the all-time high it notched two weeks ago.
When a stock outpaces its fundamentals, it's only natural to wonder if it has gotten ahead of itself. Coca-Cola's trailing revenue and earnings have risen a modest 6% and 9% over the past two quarters. Is Coca-Cola stock about to go flat? I don't think so.
There's a lot to like for the global champ of beverage stocks. By outsourcing low-margin bottling and distribution to regional partners, Coca-Cola's high-margin slice of the business consistently generates a net margin in the mid-20s. It pays out a dividend that has risen for 64 consecutive years. Its current yield of 2.4% is more than double the S&P 500.
Despite its healthy ascent in 2026, the stock is also reasonably cheap. Its earnings multiple of 26 may seem high, but that's roughly where it's been for the past five years.
In today's turbulent market, it's good to have some stability in your portfolio. Coca-Cola has earned its recession-resistant racing stripes. Its five-year beta of 0.34 implies that Coca-Cola has just a third of the correlation to the general market.
Coca-Cola provides liquidity in more ways than one. It delivers. Coca-Cola has beaten analyst profit targets for more than 10 quarters. There may come a point where the stock outpaces its benefits, but it's not there yet. Even if it does get there, today's investors will be rewarded with the upticks. Coca-Cola knows how to pour it on, in a good way.
Rick Munarriz 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.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
