The Coca-Cola Company (KO): Why Buffett’s Favorite Stock Is Leading the Dow Today

In terms of Dow stocks, the best-performing component on the blue-chip index today is none other than Warren Buffett’s favorite: The Coca-Cola Company (NYSE:KO), in which his company Berkshire Hathaway Inc. (NYSE:BRK-B) holds a nearly 9% stake. Paradoxically, the impetus for Coke’s climb may be Cyprus. As one of the soundest and most stable companies in the world — Buffett famously claims that even a monkey could run it — The Coca-Cola Company (NYSE:KO) is seen as a classic defensive stock. When things are bad, in turn, investors have a tendency to move in its direction. And as Fool Dan Dzombak observed this morning, it doesn’t hurt that the soft-drink maker pays a generous 2.9% yield.

Close on The Coca-Cola Company (NYSE:KO)’s heels are shares of Bank of America Corp (NYSE:BAC) , the nation’s second-largest bank by assets. Although most of its competitors are down today — including fellow Dow bank JPMorgan Chase & Co. (NYSE:JPM) — B of A is still riding high after its performance in last week’s Federal Reserve-administered Comprehensive Capital Analysis and Review, or CCAR. Following a solid showing in the stress tests the week before, the Fed’s CCAR cleared the way for the bank to repurchase $5 billion in common stock and $5.5 billion more in preferred shares. As I’ve discussed, this has analysts cooing about the possibility of a further 20% climb in B of A’s stock.

The article Why Buffett’s Favorite Stock Is Leading the Dow Today originally appeared on

John Maxfield owns shares of Bank of America. The Motley Fool recommends Berkshire Hathaway and Coca-Cola. The Motley Fool owns shares of Bank of America and Berkshire Hathaway.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.