Coca-Cola is the best performer in the Dow Jones index today because it has more tailwinds than headwinds despite a slowing economy. | Source: Shutterstock
Coca-Cola is trading in the green today, which is more than we can say for most of the 30 Dow Jones components. The stock is up roughly 1.5 percent, making it the top performer among its Dow Jones index peers.
Coca-Cola is a way to play the U.S./China trade war because it’s more of a defensive play in the stock market and doesn’t expose investors to the same amount of risk as some other sectors of the economy, from gaming to big tech. The stock is also benefiting from a recent Wall Street analyst upgrade, not to mention the Warren Buffett effect.
So what sets Coca-Cola apart from the Dow Jones pack? Even if the global economy continues to slow, people still have to eat and drink. Besides, demand for food and beverage stocks is only heating up thanks to heightened competition in the food-delivery space.
In a major coup for the Dow Jones component, Wall Street firm Morgan Stanley in recent days attached a “fresh money buy” label on Coca-Cola’s stock. The firm reportedly said in a note that it expects Coca-Cola to report earnings growth while the broader stock market suffers earnings declines. Meanwhile, Wells Fargo Securities’ Christopher Harvey is similarly bullish on the Dow Jones stock, reportedly saying:
“With everyone running for cash and canned goods in this downdraft, we think Food, Beverage & Tobacco names are a solid lower risk play. In our model portfolio, we hold Mondelez (MDLZ),