Last year, I took two Buffett stocks and put them head to head: Coca-cola (NYSE: KO) and Domino’s Pizza (NASDAQ:DPZ). Coca-Cola is the stock Buffett has held the longest and Domino’s is a fairly new addition. And while their business models are different and they operate in different industries, they both lead consumer goods stocks that offer value to investors.
I suggested that Coca-Cola was likely to be the winning stock in 2025, and I was right. Can you continue? Let’s review the debate and see who could win in 2026.
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Neither Coca-Cola nor Domino’s outperformed the market last year, but Coca-Cola stock came pretty close, while Domino’s was about flat.
When I picked it last year, I noted the company’s longer track record of reliability and higher dividend yield. At the time I felt those features would be important for the market in 2025 as it was entering a new year after two years of double-digit gains.
In the end, growth won out and the market posted a third straight year of double-digit profits, but Coca-Cola still earned high marks for its stability and local production in the face of rising tariffs.
As the market enters a new year after three years of double-digit gains, does this thesis still hold true?
Coca-Cola has performed well over the past year and its localized production is winning the market’s approval.
In the most recent quarter, which was Q3 2025 (Q4 earnings will be released on February 10), sales increased 5% year over year and comparable operating margin increased from 30.7% to 31.9% year over year. The company has pricing power and has been able to keep up with higher costs by increasing prices and changing packaging and sizing. It continues to look for ways to become more efficient and launch new products, and its model of acquiring global brands adds new revenue streams.
It also stands out for its dividend. Coca-Cola is the dividend king and has increased its dividend for the last 63 years in a row, rain or shine. The dividend normally yields around 3%, but today it is 2.9% because the stock has performed so well.
Domino’s has been reporting similar mid-single-digit sales growth recently, but the market hasn’t rewarded it. Global retail sales increased 6.3% year over year in the fiscal third quarter of 2025 (ended September 7), with comparable sales increasing 5.2%. Restaurants in general have been under pressure in the high inflation environment, even though pizza is a cheap and durable food. The market may be seeing more limited upside for Domino’s right now given the continued pressure.