Coca-Cola Stock at $88: Is it Time to Rethink Your Investment?

Coca-Cola's stock price has reached $88 per share, but investors should consider pausing before buying. The beverage giant's P/E ratio is now at 27, significantly higher than archrival PepsiCo's 18 earnings multiple.

PepsiCo offers a higher dividend yield of almost 4.2%, which is above Coca-Cola's near 2.4% cash return. Both companies have retained their Dividend King status for over half a century due to annual payout hikes.

A major reason to hold off on buying Coca-Cola stock may come from Warren Buffett, who has not added to Berkshire Hathaway's holdings in the company since 1994. Despite this lack of activity, Berkshire will still collect $848 million in dividend income this year alone from its original $1.3 billion investment.

This gives little incentive for Buffett's successor, Greg Abel, to sell the stock. Considering these factors, investors may want to think twice before paying $88 per share for Coca-Cola.