Coca-Cola Company (KO)

We feel that the consumer staples space is trading at attractive valuations, and for the time being, much of the reason for the decline (ozempic fears), is likely overblown. KO pays a dividend of 3.3% which is slightly above its 20-year average of 3%. Relative to its 20-year historical average valuations, its forward P/E is in line with historical averages, while its EV/EBITDA and forward price to sales are both slightly above historical averages. For an investor with a long-term time horizon, we would be quite comfortable with KO today.
Unlock Premium - Try 5i Free

It's been oversold, triggered by this anti-sugar talk driven by the anti-obesity drugs. He expects good earnings from Coke.

KO is now trading at 19.4x times' Forward P/E. KO is a mature consumer staples company and KO used to be a “bond proxy” for income investors due to the stability of its business, the capital-light nature of beverages and its high dividend yield. KO’s share price was quite resilient last year. However, due to the new expectation that rates may stay higher for longer, most consumer staples names have experienced pressure in recently, as bonds become a safer alternative for yield. KO is largely mature, revenue growth going forward is expected to be around 5%. Having said that, valuation is at a more attractive level now, currently trading at 19.4x Forward P/E, while historical averages in the last few years range from 19.3x to 26.1x. It is not a huge buy yet, but we would be OK to slowly start buying, for those with a decent time frame. 
Unlock Premium - Try 5i Free

A good company, an iconic brand, pays a good dividend and offers growth. It has diversified away from soft drinks in the last decade. Doesn't own it, because he prefers Pepsi for its exposure to salty snacks.

She used to own Coke and likes it a lot for being an international play, with 80% of revenues overseas. The PE of this and Pepsi are high though.

Down 11% since last month, but given the current hype for tech stocks, he looked in the other direction which is Coke. Pays more than a 3% dividend which they raise by 4-5% yearly consistently. Amazing free cash flow, though the PE is a little high. Would add on weakness.

Both good. He prefers PEP, as it's become more snack and less beverage. 

A Warren Buffett core holding. He gradually built his holdings in the late-80s and into the 1990s then didn't touch the shares. Coke and AmEx are now among his largest holdings. Total cost: $1.3 billion apiece. Last year, he earned $704 million in dividends from Coke + $302 million from AmEx in 2022 alone.

Like Buffett, he will never sell it. It's a core position to hold. Maybe it's a short-term trade, though, because pressure on the consumer is coming. Soft drinks will be least-effected in a recession