Coca-Cola (NYSE:KO) is among the top dividend stocks in President Donald Trump’s financial disclosures, filed with the U.S. Office of Government Ethics earlier this year.
Trump isn’t the only fan. A total of 76 elite hedge funds in Insider Monkey’s proprietary database had stakes in the company as of the end of the first quarter. The biggest stake was owned by billionaire Warren Buffett’s Berkshire Hathaway.
Coca-Cola doesn’t need AI headlines to keep growing. It sells drinks in over 200 countries and keeps expanding margins while it does it.
Don’t Miss: Donald Trump Stock Portfolio: 10 Best AI and Tech Stock Picks in 2026
The Business Keeps Compounding
Q1 2026 was a strong quarter. Revenue rose 12% year over year, with organic growth at 10%, the best pace in 11 quarters. Operating margin climbed to 35% from roughly 33%. Comparable EPS grew 18%.
The growth wasn’t just pricing. Unit case volumes rose 3% for the quarter, so people bought more, not just paid more. North America volumes grew 4%, EMEA grew 2%, Latin America added 1%. Asia Pacific still posted 5% volume growth even with a mid-single-digit hit to price and mix, as Coca-Cola trades margin for market share there.
While the market keeps fretting over AI stocks and whether a CapEx slowdown would trigger a bubble burst, KO is quietly rewarding investors with dividends and stock price growth. It’s up 17% so far this year.
Valuation
That rally pushed valuation into stretched territory. Coca-Cola now trades at a forward P/E in the mid-20s, about 69% above the sector median. Its forward PEG ratio runs roughly 66% above peers, and its price-to-sales multiple sits more than 7 times higher than the sector average.
Investors are paying for continued margin expansion and market share gains, and that’s a higher bar to keep clearing.
A Dividend That Just Keeps Growing
Coca-Cola is a Dividend King with a streak of annual increases now past six decades, a rare feat.
The forward yield sits around 2.5%, below its own four-year average, another sign the stock has gotten pricier relative to the income it pays. Dividend growth ran about 4.6% annually over the past five years, well above peer averages. Analysts expect 4-5% growth going forward, backed by a payout ratio that’s high but still workable given free cash flow trends.
What Could Go Wrong
Inflation is the risk to watch. Sugar, corn syrup, coffee, and aluminum costs squeeze margins directly, and freight and packaging move the same way. Competition matters too. Coca-Cola’s brand moat runs deep, but new entrants keep showing up, and its rivals are just as big and well-funded. Consumers shifting away from sugary drinks is a slower risk, one Coca-Cola keeps addressing through its zero-sugar and juice lines.
Hedge Fund Resource Center