Coca-Cola Holds 21% of Monster Beverage, Attracting Value Investors
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 03 2026
0mins
Should l Buy KO?
Source: Fool
- Market Performance Comparison: Over the past year, Monster Beverage's stock surged by 45%, significantly outpacing Coca-Cola's 12% increase, indicating a shift in consumer preferences towards energy drinks among younger demographics.
- Company Size Disparity: With a market cap of approximately $300 billion, Coca-Cola dwarfs Monster Beverage's $75 billion valuation, allowing the former to leverage its scale for industry consolidation and rapid brand expansion through acquisitions.
- Growth Rate Analysis: Monster Beverage is projected to achieve a compound annual growth rate of about 12% in sales and earnings through year-end 2024, while Coca-Cola's earnings growth remains stable at around 4%, highlighting their distinct market positioning and growth trajectories.
- Valuation Comparison: Monster Beverage's P/E ratio stands at 44x, significantly higher than Coca-Cola's 23x, suggesting that while Monster's growth potential is appealing, its high valuation may deter value-focused investors in favor of Coca-Cola's more reasonable pricing.
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Analyst Views on KO
Wall Street analysts forecast KO stock price to rise
14 Analyst Rating
13 Buy
1 Hold
0 Sell
Strong Buy
Current: 79.000
Low
71.00
Averages
79.33
High
85.00
Current: 79.000
Low
71.00
Averages
79.33
High
85.00
About KO
The Coca-Cola Company is a beverage company. The Company's segments include Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Global Ventures; and Bottling Investments. It sells multiple brands across several beverage categories worldwide. Its portfolio of sparkling soft drink brands includes Coca-Cola, Sprite and Fanta. Its water, sports, coffee and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa, Georgia, Fuze Tea, Gold Peak and Ayataka. Its juice, value-added dairy and plant-based beverage brands include Minute Maid, Simply, innocent, Del Valle, fairlife and AdeS. It operates in two lines of business: concentrate operations and finished product operations. Its concentrate operations sell beverage concentrates, syrups, including fountain syrups, and certain finished beverages to authorized bottling operations. Its finished product operations sell sparkling soft drinks and a variety of other finished beverages.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Management Change: CEO James Quincey will depart at the end of March, with COO Henrique Braun taking over, a transition that may unsettle investors, particularly given the company's lowered sales growth expectations.
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- Holding Status: Berkshire Hathaway has held Coca-Cola for over 35 years, with 400 million shares valued at approximately $30.8 billion as of September 2025, representing 9.4% of its portfolio, indicating long-term confidence in the beverage giant.
- Earnings Performance: Coca-Cola reported Q4 earnings of $0.58 per share on $11.8 billion in revenue, surpassing Wall Street's $0.56 estimate, yet falling short of the $12.05 billion forecast, highlighting a slowdown in sales growth.
- Management Change: CEO James Quincey will depart at the end of March, with COO Henrique Braun taking over, a transition that may unsettle investors, particularly given the company's lowered sales growth expectations.
- Market Challenges: Coca-Cola faces a complicated global trade environment with new sugar taxes and shifting consumer preferences towards healthier options, despite a 10% stock increase year-to-date, indicating potential hurdles for the incoming CEO.
See More
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- Coca-Cola Sales Growth: In 2025, Coca-Cola's sales grew by 5% after adjusting for foreign currency effects and acquisitions, with price/mix contributing 4 percentage points and concentrate sales adding 1 percentage point, indicating sustained brand strength and market share growth despite inflationary pressures.
- Coca-Cola Dividend History: Coca-Cola has raised its dividend for 63 consecutive years, with the most recent increase exceeding 5%, and a payout ratio of 67% suggests the company has ample profits to support its dividends, making it attractive for long-term investors.
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- Market Share Growth: Alphabet's Google Gemini has captured 21% of the enterprise large language model market and is poised to surpass ChatGPT's 27% share by 2025, demonstrating its competitive edge and market leadership in the AI sector.
- Strong Financial Performance: In 2025, Alphabet generated $402.8 billion in revenue, a 15% increase year-over-year, with operating income nearing $130 billion and an operating margin of 32%, indicating robust profitability amid ongoing growth.
- Capital Expenditure Plans: Alphabet anticipates capital expenditures of $175-$185 billion for 2026, exceeding analyst expectations; however, with $30.7 billion in cash reserves and strong profitability, the company is well-positioned to support its data center expansion.
- Long-Term Debt Financing: Alphabet aims to raise $20 billion through the issuance of 100-year bonds, and despite its long-term debt of $46.5 billion, the company's diversified revenue streams and strong cash flow provide a solid financial foundation for taking on additional debt.
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- Capital Expenditure Plans: Anticipated capital expenditures for 2026 are projected to be between $175 billion and $185 billion, exceeding analyst expectations; despite the high costs of building data centers, Alphabet's cash reserves grew by 30% to $30.7 billion, showcasing its financial strength.
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- Valuation Surge: Wolfe Research noted that market-weighted valuations for consumer staples have reached their highest levels since the 1990s, reflecting increased investor confidence in the sector despite a lackluster overall market performance.
- Walmart's Market Position: Walmart's stock jumped 20% in 2026, allowing it to join the $1 trillion market cap club, showcasing its adaptability in the AI economy and solidifying its leading position in retail.
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