Stagflation occurs when high inflation coincides with stagnant economic growth and rising unemployment, creating challenging market conditions for investors. In these situations, companies with strong pricing power, steady cash flows, and resilient fundamentals can offer a safe haven, providing stability when traditional growth stocks falter.

Recognizing this shift, Barchart has introduced a new screener that helps investors identify such defensive stocks. This innovative tool filters for companies that consistently deliver robust performance even during inflationary periods, providing a clear strategy to combat economic uncertainty. 

Among the top contenders emerging from this screening process is Coca-Cola (KO). Renowned for its defensive business model and long-standing presence in Warren Buffett’s portfolio, KO has earned a reputation as a reliable pick for investors seeking security in volatile times. 

As the specter of stagflation looms, Coca-Cola stands out as an ideal stock to add to your portfolio, offering both stability and the potential for long-term growth.

About KO Stock

Coca-Cola (KO) is the leader in the beverage industry with a legacy dating back more than one century. Known for more than just its original soda, the company now offers a wide range of drinks to match different tastes and lifestyles. The company boasts a market cap of around $307 billion.

The history of Coca-Cola’s stock during recessions is impressive. Despite the tariffs-driven market correction in 2025, KO is still up 16% in the year to date, thanks to its strong brand reputation, which helps it navigate tough economic conditions. 

The stock also trades above both its 50- and 200-day moving averages, signaling continued bullish momentum.

For investors seeking steady dividends with relatively low risk, KO is an ideal choice. The company has raised its dividend for 63 consecutive years, earning the title of a Dividend King. It currently pays an annual dividend of $2.04, yielding at 2.04%.

However, these perks come with a premium price. The stock is trading at a 23.94 forward earnings and 6.5 times sales, significantly above the consumer staples sector median averages of 7x and 1.8x, respectively. 

Moreover, these metrics align with the company’s five-year historical averages, suggesting that the premium valuation reflects consistent market confidence in Coca-Cola’s performance and growth potential, not speculative overvaluation.

KO Stock Rises on Strong Q4 Results

On Feb. 11, shares of Coca-Cola jumped nearly 5% after the company reported strong Q4 and full-year results. Revenue came in at $11.5 billion, beating estimates of $10.7 billion, while EPS of $0.55 also exceeded the consensus estimate of $0.52. Although full-year revenue grew by just 6% in 2024, the Zero Sugar beverage category saw an impressive 9% increase.

The beverage giant’s revenue was buoyed by strong performance across divisions, with notable contributions from sparkling soft drinks, as well as the water, sports, coffee, and tea segments.

“In North America, we grew both transactions and volume and had robust top-line and profit growth during the quarter. Trademark Coca-Cola and Fairlife remain leaders in at-home retail sales growth,” said CEO James Quincey during the earnings conference call.

Looking ahead to 2025, management projects organic revenue growth of 5% to 6% and expects comparable earnings per share to increase by 2% to 3%.

Analyst Ratings on KO Stock

Wall Street analysts remain highly optimistic about Coca-Cola stock’s growth prospects. Among 22 analysts, 20 rate the stock a “Strong Buy,” one has a “Moderate Buy” rating, and one assigns a “Hold” rating. 

The average 12-month price target stands at $76.91, suggesting modest 6% upside from current levels.