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 Fool.com.

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.