10 Best Counter Cyclical and Defensive Stocks to Invest In

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

Market Capitalization as of September 11: $304.49

Number of Hedge Fund Investors in Q2 2024: 68

The Coca-Cola Company (NYSE:KO) is one of the best defensive stocks to invest in, as it operates as a beverage company manufacturing and selling various nonalcoholic beverages. It provides an array of sparkling soft drinks like water, coffee and tea juice, and plant-based beverages that people can consume regardless of the economic situation.

The beverage giant is among the most well-known brands in the globe. It’s so deeply rooted in society that it allows it to generate significant sales year-round. Brand loyalty shields it from newcomers competing for placement on store shelves. This means any business attempting to challenge its dominance must invest exorbitant sums to even start to rival the level of recognition it enjoys.

The value extends beyond the brand itself; the corporation behind it is equally significant. The Coca-Cola Company (NYSE:KO) has steadily expanded throughout the years and keeps advancing. It is a reliable, consistent enterprise that regularly adjusts to meet the needs of its customers.

The Coca-Cola Company (NYSE:KO) ‘s straightforward business model produces strong financial outcomes. Its revenue has grown at a compound annual growth rate (CAGR) of 6% over the past five years. Its free cash flow experienced a 7% CAGR during the same timeframe, and its net income saw an average growth rate of 10%.

Simply put, Coca-Cola’s sales are rising faster than inflation, and the company is also becoming more profitable as time goes on. Coca-Cola holds some of the highest profit margins in the market. Over the past year, Coca-Cola generated $46.5 billion in income, retaining $9.1 billion in free cash flow.

Amid the robust growth, The Coca-Cola Company (NYSE:KO) continues to return value to shareholders. It distributed dividends amounting to $8 billion last year. While Coca-Cola is priced at a slight premium of forward price to earnings multiple of 23, it also offers an annual dividend yield of 2.71%.

By the end of Q2 2024, 68 hedge funds held stakes in The Coca-Cola Company (NYSE:KO), with total investments amounting to $31.98 billion. As of June 30, Berkshire Hathaway was the largest shareholder, holding a position valued at $25.46 billion.