We recently published a list of 10 Defensive Dividend Stocks To Buy During Market Sell Off. In this article, we are going to take a look at where The Coca-Cola Company (NYSE:KO) stands against other defensive dividend stocks to buy during market sell off.
The importance of defensive dividend stocks only becomes clear when the broader market is taking a hit. The S&P is down nearly 8% in a month while Nasdaq has lost over 11.41%. Investors are wondering how to protect themselves from volatility and the answer lies in defensive stocks.
Here is a key distinction investors must understand. Growth stocks rely on price appreciation to generate shareholder returns, something that is hard to achieve when the broader market is facing a severe sell-off. Dividend stocks, on the other hand, became more attractive. They not only help reduce the volatility but as their price goes down, their yield becomes more attractive.
We therefore decided to identify the best stocks for such a scenario. To come up with the list of 10 defensive dividend stocks to buy during a market sell-off, we only considered stocks belonging to the Consumer Defensive sector with a market cap of at least $2 billion and a dividend yield of at least 3%.
A row of factory workers assembling bottles of sparkling soft drinks on a conveyor belt.
The Coca-Cola Company (NYSE:KO)
The Coca-Cola Company (NYSE:KO) is a producer, seller, and marketer of Coca-Cola trademark beverages. It provides sparkling beverages, water, and alcoholic beverages. The stock’s 2.95% dividend yield didn’t make it past our screener for this list, but we decided to include it due to the solid investment opportunity this stock provides in tough times.
Coca-Cola (NYSE:KO) grew at 12% in 2024 but the 2025 guidance predicts a slowdown, with growth expected to stay between 5% and 6%. One reason for this is the forex impact, so the underlying business is as healthy as ever. The company has rewarded long-term investors in the past and there is no fundamental shift in the business or the economy to suggest that won’t continue.
The forward PE ratio of 23.39 suggests the stock is slightly expensive compared to its historic range. The recent rally in the stock has a lot to do with this and investors may feel they missed out on an attractive price. However, buying great stocks at a premium isn’t entirely a bad thing as the last 10 years have shown us.
Overall, KO ranks 7th on our list of defensive dividend stocks to buy during market sell off. While we acknowledge the potential of KO as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as KO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
