3 Reasons to Buy Coca-Cola Stock Like There's No Tomorrow

It's not every day, or every year, that Coca-Cola (NYSE: KO) stock beats the market. In fact, it's been a rare occurrence over the past 30 years. However, it's happening now. Coca-Cola stock is up 12% this year, while the S&P 500 is down 4%.

It's as good a time as ever to understand why Coca-Cola is such a great stock to own. Here are three reasons you might want to add shares to your portfolio.

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1. It's as safe as they come

The market has been experiencing correction-like conditions over the past two weeks as the economy is roiled with new tariffs and new talk of a potential recession. When this happens, investors typically pull their money out of risky stocks and flock toward safer shores. Safe stocks are those that are well-established and proven. These kinds of companies, like Coca-Cola, have withstood the test of time. They make products that are always in demand, creating a recurring revenue stream because they're so reliable for sales.

Investors see value in Coca-Cola stock because they're not worried that their investments are going to be wiped out. While Coca-Cola hasn't been a market-beating stock over the past few decades, it offers something else that's incredibly valuable. I wouldn't suggest that every investor put all of their funds into Coca-Cola stock or even a group of similar stocks, but I would recommend that even the most growth-focused investors have at least some of their funds in these kinds of stocks.

The market does well an overwhelming amount of the time, but not always. It's times like today that investors recognize the importance of owning secure stocks that protect their portfolios when the market is down.

2. It still has plenty of opportunity

Many of the oldest and most stable companies grow at a snail's pace. They can still offer value in their stability, but Coca-Cola has more than that to offer. I wouldn't label it a growth stock, but it still has ample opportunity to expand, providing investors with confidence that it will still be around and quenching thirst for the foreseeable future.

Consider how well it did last year despite pressure and inflation. Unit case volume rose 1%, and revenue was up 3%. Organic revenue, which strips away the impact of currency changes, acquisitions, and similar factors, was up 12%.

It wasn't all fun and games, and CEO James Quincey reassured shareholders that the company is navigating the "dynamic" environment. Comparable earnings per share were up 7% for the year, but free cash flow was down 51%, and the results were altogether mixed. However, investors are still running to the stock. There isn't a lot of debate about how well it can continue to manage and where it's going.

It has 28% of the global market value in its categories, which it defines as non-alcoholic, ready-to-drink beverages, and that's increased from 26% ten years ago. As ubiquitous as it might seem in certain regions, it sees a huge opportunity to capture market share, specifically in non-developed global regions. And that's on top of industry growth, which is, on average, about 4% annually.

3. The dividend, of course

I've been holding off on talking about the dividend to give it its own space, but the dividend is tied to everything else about Coca-Cola's business. It's a Dividend King, and it's fully committed to supporting its growing dividend.

Coca-Cola just announced its 63rd consecutive annual quarterly dividend increase of 5.2%, from $0.49 to $0.52, translating into annual dividends of $2.04. That's an increase every year since 1962, and it's one of the best track records on the market today.

But what makes Coca-Cola's dividend stand out even more is that it's high-yielding. Dividend stocks can offer different benefits for investors, and many Dividend Kings offer rock-solid reliability. That's their value, even if the yield isn't very high. But Coca-Cola's dividend is the whole package: it's incredibly reliable, it's increasing, and its yield is high. Today, since the stock is soaring, the yield is lower than average at 2.8%, but it's still more than double the S&P 500 average of 1.3%.

Coca-Cola is an excellent choice for an anchor stock for a diversified portfolio, providing security and passive income under all kinds of circumstances.

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

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Jennifer Saibil 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.