Coca-Cola stock has outperformed the S&P 500 in seven of the eight calendar years since 1980 when the index posted a loss, though shares still fell in three of those years. The stock now trades near $86, up about 23% in 2026 and close to 26 times earnings, a valuation some investors may find rich heading into any downturn.
A near-unbroken streak in down years
Since 1980, the S&P 500 has posted a negative total return in eight calendar years, including 1981, 1990, 2000 through 2002, 2008, 2018, and 2022. Coca-Cola beat the index in seven of those years. Averaged across all eight, Coca-Cola's total return came to about 1% a year, versus an average index loss of roughly 14%.
The strongest years stand out. Coca-Cola returned around 11% in 1981 as the index dropped about 5%, and about 23% in 1990 while the index lost 3%. More recently, shares returned roughly 7% in 2018 and 11% in 2022, years the index fell 4% and 18% respectively.
Steady demand for sodas and bottled water, unlike pricier discretionary purchases, likely helps explain the pattern.
Earnings momentum behind the 2026 rally
Coca-Cola's business looks healthy heading into any potential downturn. The company lifted adjusted earnings per share 11% year over year in the second quarter of 2026, after 18% growth in the first quarter, a period that included six extra days. Management also raised its full-year adjusted EPS growth outlook to 9% to 10%, up from 8% to 9%.
Three years it still lost money
The record isn't spotless. Coca-Cola's shareholders lost money in 2001, 2002, and 2008. In 2001, Coca-Cola actually lagged the index, losing about 21% versus the index's 12% drop. In 2008, Coca-Cola's total return was a loss of around 24%, even as the S&P 500 dropped 37%, giving up almost a quarter of its value over 12 months.
Notably, Coca-Cola headed into 2008 trading at around 24 times its 2007 earnings, a price-to-earnings ratio close to where shares trade now. Today the stock's P/E ratio sits near 26, falling to about 24 based on expected 2027 earnings.
Analyst Daniel Sparks says he would keep holding Coca-Cola through a rocky bear market, but for new money, he would want a lower price than today's.
Source: The Motley Fool
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