Buffett Brain · Research note
Score updated 5 Oct 2026 · analysis from 1 Jun 2026
KO· Consumer Staples
Coca-Cola
Coca-Cola is a magnificent syrup machine earning a 61.7% gross margin, but at 25 times earnings the price asks you to pay for thirty good years up front.
Buffett fit
Partial fit
Owner
68
Durability
82
Management
52
Price
20
Score updated 5 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Consumer Staples stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned the whole company outright, I would admire the economics and wince at the entry check.
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Durability scores 82 for good reason. People have been drinking this stuff for over a century, the worst single-year earnings drop on record was only 2.7%, and the share count has been flat to slightly shrinking.
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Management earns a middling 52 here, and the numbers tell you why. is 13.9% trailing and 15.3% over five years, which is fine but not the fortress it once was, and sits at 1.30 with net debt at 1.8 times EBITDA.
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There is no here, and I will not pretend otherwise. The owner-earnings yield is a meager 1.53% and the stock trades at 25.2 times earnings with an EV/ of 27.6, so you are paying a premium price for a merely good return.
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- The full reasoning behind all four pillars
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1 of 61.7% and of 29.3% confirm a concentrate model with extraordinary unit economics.
- 2Durability scores 82, backed by a worst-case annual earnings decline of just 2.7%.
- 3 of 15.3% over five years shows the brand genuinely earns its keep on the capital deployed.
- 4 is strong: a five-year revenue CAGR of 5.5% comes largely from raising prices, not chasing volume.
Concerns
7- 1Valuation is the headline problem: 25.2 times earnings and an owner-earnings yield of only 1.53% leave no room for error.
- 2EV/ of 27.6 is a rich multiple to pay for a business growing revenue in the mid-single digits.
- 3 is just 40% of net income, so reported earnings overstate the cash actually landing in the till.
- 4Financial health scores only 39, dragged down by of 1.30 and net debt of 1.8 times EBITDA.
Price history
$85.65+58.3%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Coca-Cola sells concentrate and syrup to a global web of bottlers and pockets the brand royalty, which is why it keeps a 61.7% and a 29.3% while owning very few factories. It is a toll booth on human thirst, and the toll compounds slowly, with revenue growing about 5.5% a year and earnings per share near 7.8%. The business does not need to be clever to win, it just needs to keep showing up on every shelf on earth.
How this analysis has moved
The call has held across 2 reviews.
Sep 27, 2026 → Oct 4, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Consumer Staples
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