Where Will Coca-Cola Stock Be in 5 Years?

Key Points

  • Coca-Cola has been outperforming the market recently, prized for its stability and safety, especially under economic pressure and tariff changes.
  • Despite historical underperformance compared to the S&P 500 over the past five years, management expects long-term sales growth of about 5% annually.
  • Coca-Cola is a Dividend King, having raised its dividend for 63 consecutive years, showcasing its focus on profitability and shareholder value.
  • The company sees significant growth opportunities, with only 14% market share in developed countries and 7% in developing markets, leaving room for expansion.
  • Organic revenue grew by 6% in Q1 2025 despite a 2% net revenue decline, reflecting resilience in a challenging environment.

Summary

Coca-Cola (NYSE: KO) has enjoyed a strong year, emerging as a favored stock amid economic pressures and tariff changes due to its stability and global presence. Despite historically lagging behind the S&P 500 over the past five years, the company has shown resilience, with organic revenue up 6% in Q1 2025, even as net revenue dipped 2%. As a Dividend King with 63 years of consecutive dividend increases, Coca-Cola remains a safe haven for investors, bolstered by its status as the world’s largest beverage company with nearly $47 billion in sales. Management projects 4-6% organic revenue growth long-term, driven by acquisitions like Costa coffee and market expansion, especially in developing regions where it holds just 7% market share. While economic challenges and pricing pressures loom, the company’s local production and strong fundamentals position it for potential growth over the next five years. However, it may not consistently beat the market as investors shift from safe stocks, though its dividend and safety make it a valuable portfolio addition.

The Motley Fool
July 20, 2025
Crypto
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