Coca-Cola Stock Outperforms S&P 500 in Seven of Eight Down Years Since 1980

Coca-Cola (KO) has delivered a higher total return than the S&P 500 in seven of the eight calendar years since 1980 when the broader index lost money, including dividends. The S&P 500 declined in 1981, 1990, the three-year span from 2000 to 2002, and in 2008, 2018, and 2022. During these periods, Coca-Cola shareholders ended up with a positive return in five of the eight years, while the index averaged a loss of about 14% per year. Coca-Cola's average total return across those eight years was roughly 1%, leaving shareholders approximately even on average despite the market downturns.

The resilience is most visible in specific down markets. In 1981, Coca-Cola returned about 11% while the S&P 500 fell about 5%. In 1990, the stock gained about 23% against a 3% index drop. More recently, Coca-Cola posted a total return of around 7% in 2018 when the index lost 4%, and about 11% in 2022 when the index dropped 18%. The source attributes this performance to the nature of the product, noting that demand for small-ticket items like soda and water tends to hold up better than demand for cars or vacations when consumers tighten spending.

Current financial results support the stock's recent strength. In the second quarter of 2026, Coca-Cola increased its non-GAAP earnings per share by 11% compared to the same period last year. This followed an 18% growth rate in the first quarter, a figure boosted by six extra days, and a significant jump from the 4% growth reported in the second quarter of 2025. Management raised its full-year outlook for adjusted earnings-per-share growth to a range of 9% to 10%, up from a previous estimate of 8% to 9%. This accelerated earnings growth aligns with the stock's performance, as shares trade near $86, representing a rise of about 23% this year and sitting within roughly 6% of the all-time closing high set in late August.

However, outperforming the index does not guarantee profit. Shareholders lost money in three of the eight down years: 2001, 2002, and 2008. In 2001, Coca-Cola's total return was a loss of around 21%, lagging the S&P 500's 12% decline. In 2002, the stock fell by a loss of 5.5%, significantly outperforming the index's 22% drop. In 2008, Coca-Cola's total return was a loss of about 24%, whereas the S&P 500 dropped 37%. At the start of that financial crisis year, Coca-Cola traded at around 24 times its 2007 earnings, a valuation level similar to its current multiple of about 26 times earnings.

The most severe drawdown occurred after investors paid premium prices for the stock. At the end of 1998, Coca-Cola traded at around 47 times earnings after its earnings per share fell by 13% that year. Over the subsequent four years, Coca-Cola's total return was a loss of about 30%, underperforming the S&P 500's loss of about 24%. The steepest losses occurred in 1999 and 2001. The stock did not close above its late-1998 high until late in 2014. Today's valuation is lower than that extreme, with the price-to-earnings ratio at approximately 26 now and about 24 based on expected earnings for 2027.