Coca-Cola ($KO): Is Warren Buffett's 'Golden Goose' Still Viable in 2025?

Hello, Master. Today's topic is a stock that investment legends like Warren Buffett have long adored: Coca-Cola ($KO). The three of us will discuss why this stock is known as the epitome of a stock that 'makes you money while you sleep,' and whether that reputation still holds true in 2025.

Mew

Master, I will begin with an objective data briefing on Coca-Cola. As of July 18, 2025, Coca-Cola is a company that symbolizes stability for investors worldwide.

• Company Status: Coca-Cola is a leading company in the consumer staples sector, operating in every country worldwide except North Korea, Cuba, and Russia, boasting immense brand power and distribution networks.


• Stock Price and Valuation: The current stock price is trading at around $70.59. Its 12-month forward price-to-earnings (P/E) ratio is approximately 28.2x, indicating it trades at a high premium compared to the market average.


• Dividend Status (Dividend King): Coca-Cola is a true 'Dividend King,' having increased its dividend for 63 consecutive years. The current dividend yield is about 2.7%, with a quarterly dividend payment of $0.51 per share.


• Recent Earnings: In the most recently announced Q1 2025 results, revenue saw a slight decrease due to factors like currency exchange rates and the sale of bottling operations, but net income increased by 5%, showing solid profitability. The company forecasts it will maintain 5-6% organic revenue growth for the full year of 2025.


• Warren Buffett's Portfolio: Berkshire Hathaway, led by the 'Oracle of Omaha' Warren Buffett, has been invested in Coca-Cola since 1988. It remains a core long-term investment, accounting for about 9.5% of the portfolio with a stake valued at $27.8 billion. Considering Berkshire's average purchase price, they are now earning a phenomenal annual return of about 63% of their initial investment from dividends alone.

Kurumi

My Lord! Isn't this just the perfect stock?! Just looking at the data makes my heart pound! The truly wealthy love stocks like this! Devilish!

First, brand power that no one in the world can ignore! Is there anyone on this planet who doesn't know the Coca-Cola logo? This isn't just a beverage; it's a culture, a piece of history, an icon that's always present in people's happy moments! This kind of powerful brand has a magical shield that makes people keep coming back, no matter the economic crisis!

Second, the dividends that reliably flow into your account! Increasing dividends for 63 years without missing a single time—that's a level of loyalty to my Lord that rivals a great demon of the underworld! Even if the stock price drops a bit, you can just hold on and collect the dividends. And if you use those dividends to buy more stock, the magic of compounding unfolds! Isn't the fact that old Warren Buffett is making more than half his initial investment back every year from dividends alone proof of that?!

Third, it's not just a cola company! Mika-pi is always talking about the crisis of sugary drinks, but this company already has a full beverage portfolio including water (Dasani), sports drinks (Powerade), juice (Minute Maid), and coffee (Costa Coffee)! It's constantly transforming to keep up with the times!

This isn't a stock for hitting a short-term jackpot. It's a 'golden goose' stock that safely protects my assets while consistently delivering returns far higher than bank interest!

💖 Kurumi's Heart-o-Meter Score: 90/100

In this uncertain world, it's the best partner to help you sleep soundly at night!

Mikael

Human, does Kurumi's talk sound sweet to you? Then I suppose I must speak from a different perspective. Coca-Cola is certainly a stable stock, but that's just another way of saying its 'growth has stagnated.' I am reading several clear danger signals from this red can.

First, its sluggish growth rate. As confirmed in Mew's data, the annual organic revenue growth target is 5-6%. In an era where companies are growing by hundreds of percent thanks to the AI revolution, can you be satisfied with this level of growth? It's like leisurely riding a bicycle on a high-speed expressway. Are you not considering the risk of being hit by a car coming from behind?

Second, the headwind of our times: the 'health' trend. A war on sugar is being waged worldwide. While they are responding with Zero Sugar products, the negative perception of carbonated drinks themselves is a massive current. As governments introduce sugar taxes and strengthen regulations, Coca-Cola's core business is bound to take a hit. This is a structural risk that could shake the very foundation of the company.

Third, the high price paid for safety. The P/E ratio is over 28x. The market is placing an excessively high price on a company growing at 5% annually. Warren Buffett bought this stock decades ago when it was much cheaper. Is it truly wise to buy at this price now? It could just be the trap of the 'Buffett premium,' where you pay a high price simply because 'Buffett bought it.'

Fourth, the illusion created by a strong brand. Because everyone believes Coca-Cola is safe, the shock could be even greater when a crisis does hit. High expectations lead to great disappointment. This stock will not grow your assets explosively. It might just end up barely keeping pace with inflation.

🚨 Mikael's Risk Score: 65/100

You must face the shadow of stagnation hidden by its glamorous reputation. This may be closer to 'storing' assets than 'growing' them through investment.