Coca-Cola (KO)
The clearest example of a brand moat in the market, and a company that mostly sells concentrate rather than drinks. It has raised its dividend for 64 consecutive years.
The business
Coca-Cola largely sells concentrate to bottling partners, who add the water, package it and distribute it. That is why margins are so high: the capital-intensive part of the business belongs to somebody else.
Q2 2026 net revenue was $13.4bn, up 7%, with organic revenue up 6% and global unit case volume up 5%. Operating margin was 34.9%. The company raised full-year guidance, and is selling its African bottling operations.
The numbers that matter
All figures as reported on the dates shown. Nothing on this page updates with the share price — the live valuation sits in the app.
| Measure | Latest reported | |
|---|---|---|
| Q2 2026 net revenue | $13.4bn | +7% |
| Unit case volume | +5% | led by India, China, US, Brazil |
| Comparable operating margin | 35.6% | from 34.7% |
| Comparable EPS | $0.97 | +11% |
| Coca-Cola Zero Sugar volume | +16% | |
| Consecutive dividend rises | 64 years | |
| Estimated IRS exposure | ~$14bn | 2010-2025, under appeal |
The moat
Brand, and it is the textbook case. The formula is not the moat — the moat is that billions of people have a preference formed over a century, reinforced by distribution so universal the product is available almost everywhere on earth.
The evidence is in the pricing: Q2 2026 price/mix rose 2% while volumes still grew 5%. Raising prices without losing customers is the definition of pricing power, and it is why a comparable operating margin of 35.6% is sustainable in a business selling flavoured sugar water.
What to check before you value it
Volume growth against price growth
Q2 2026 volumes rose 5% and price/mix 2%. Growth driven by volume is healthier than growth driven only by price, because price rises eventually meet a limit.
The IRS dispute
Coca-Cola estimates potential aggregate incremental tax and interest of approximately $14bn for 2010 to 2025 under the Tax Court methodology in a long-running transfer-pricing dispute, which it is appealing. Most summaries of the results omit this.
Currency effects
Q2 2026 EPS growth of 16% included a 4-point currency tailwind. Comparable EPS growth of 11% included 2 points. Currency flatters or flatters against, and it reverses.
Portfolio changes
The pending sale of Coca-Cola Beverages Africa is expected to create near-term revenue and EPS headwinds. Disposals change the comparison base, so like-for-like growth needs checking.
Recent filings
Dated announcements only. Figures below were reported on the dates shown and are not updated as the share price moves.
How Oak Growth scores it
Oak Growth runs a discounted cash flow on Coca-Cola and publishes the assumptions behind it — the discount rate, the growth rate and the terminal value — alongside a margin of safety against the live price. It also scores the company on the four pillars: moat, management, economics and value, in that order, because price comes last. The live figures sit in the app rather than on this page, so nothing here goes stale.
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Why is Coca-Cola considered a good example of an economic moat?
Because it can raise prices without losing customers. In Q2 2026 price/mix rose 2% while volumes still grew 5%, supporting a comparable operating margin of 35.6%. That combination — higher prices and higher volumes together — is what brand-based pricing power looks like.
Does Coca-Cola actually make the drinks?
Mostly not. It sells concentrate to bottling partners who add water, package and distribute the product. The capital-intensive part of the business sits with the bottlers, which is a large part of why Coca-Cola's margins are so high.
What is the Coca-Cola IRS dispute?
A long-running transfer-pricing disagreement with the US tax authorities. Coca-Cola is appealing an adverse Tax Court decision and estimates potential aggregate incremental tax and interest of approximately $14bn for 2010 through 2025 under the Tax Court methodology, while stating it believes its positions are more likely than not to be sustained.
How long has Coca-Cola raised its dividend?
The company raised its dividend for the 64th consecutive year in 2026. A record of that length is unusual and is one reason the shares are held widely by income investors.
Related
What is an economic moat? → · Buffett's investment strategy → · Dividend yield →