Coca-Cola Stock Holds Up Well During Market Downturns, But Is It Overvalued?

Coca-Cola's stock has historically held up well during market downturns. Since 1980, the S&P 500 has had eight calendar years with negative total returns, and in seven of those years, Coca-Cola's total return was higher than the index.

However, this doesn't mean the stock is immune to losses. In three of these years, 2001, 2002, and 2008, Coca-Cola's shareholders lost money. The worst year was 1990, when the company's total return was a loss of about 30%.

Coca-Cola's current valuation is around 26 times earnings, which is higher than its price in 2008 but lower than its peak of 47 times earnings in 1998.