KO's focus on core brands, innovation efforts, redefined marketing approach and digital expansion position it for long-term growth.

Companies that make shareholders wealthy must be efficient and profitable, and Coca-Cola meets both criteria. In a given year, the company converts roughly 20% to 30% of its sales into free cash flow and earns a solid 15% return on invested capital. In other words, good things happen when Coca-Cola invests in the business.

Shares of Coca-Cola Co. KO slid 1.52% to $60.81 Monday, on what proved to be an all-around mixed trading session for the stock market, with the S&P 500 Index SPX rising 0.55% to 5,975.38 and the Dow Jones Industrial Average DJIA falling 0.

However, if you pull the lens further back, PepsiCo's drop from its three-year high is around 22%, while Coca-Cola's is around 14%. But Coke enjoyed a rally from late 2023 that lasted into 2024, while PepsiCo didn't. All in, investors appear to have been a little more negative about PepsiCo overall.

PepsiCo and Coca-Cola are both undervalued, and I foresee an appreciable upside in 2025. Click here to read why both PEP and KO stocks are a Buy.