Warren Buffett and Jim Cramer Love These 5 Stocks

4. The Coca-Cola Company (NYSE:KO)

Warren Buffett’s Stake Value: $22,392,000,000

Jim Cramer has called The Coca-Cola Company (NYSE:KO) one of his favorite stocks to own during a recession. He thinks that The Coca-Cola Company (NYSE:KO) is a “textbook” example of stocks to buy during troubled times. Jefferies recently started covering The Coca-Cola Company (NYSE:KO) stock with a Hold rating. Jefferies’ analyst  Kaumil Gajrawala set a $64 price target on The Coca-Cola Company (NYSE:KO). While the analyst believes The Coca-Cola Company (NYSE:KO) has strong growth potential in developing markets, he’s worried about a potential tax settlement in the short term.

“Coke may be on the hook for $14bn in taxes (more than a year’s earnings) and a 3.5pp increase to its effective tax rate. This equates to ~10% of market cap and $5.60 a share,” Gajrawala wrote in a note.

Warren Buffett is a big fan of Coca Cola stock and also the Coke drink. His hedge fund Berkshire reported owning a stake worth over $22 billion in the company as of the end of the September quarter.

Rowan Street Capital made the following comment about The Coca-Cola Company (NYSE:KO) in its Q4 2022 investor letter:

“Let’s take The Coca-Cola Company (NYSE:KO) for example. Its dividend yield is 2.8%, earnings are estimated to grow at only 3.6% rate per year over next 4 years, and its earnings multiple is currently at 24x (based on next years forecasted earnings). KO has an anemic growth, so we can argue that paying 24x earnings is not very attractive. Let’s assume that the multiple will stay constant over the next 3-5 years, thus our expected annual returns will be 2.8%+3.6% = 6.4% (that is below the current reported inflation rate and only slightly above the risk-free rate of 4%).”