Want to Beat the S&P 500? You'll Regret Buying This Top Warren Buffett Stock

Motley Fool06-23

Even if we include this company’s hefty dividend, its shares have underperformed the S&P 500. A strong brand and huge profits can’t compensate for minimal growth prospects. Shares ...

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You'll Regret Buying This Top Warren Buffett Stock","media":"Motley Fool","content":"<div>\n<p>Even if we include this company’s hefty dividend, its shares have underperformed the S&P 500. \n\n\n\n\n\n\n\nA strong brand and huge profits can’t compensate for minimal growth prospects. \n\n\n\n\n\n\n\nShares ...</p>\n\n<a href=\"https://www.fool.com/investing/2024/06/23/want-beat-sp-500-regret-buying-top-buffett-stock/\">Source Link</a>\n\n</div>\n","source":"fool_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Want to Beat the S&P 500? 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You'll Regret Buying This Top Warren Buffett Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-23 19:15 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/06/23/want-beat-sp-500-regret-buying-top-buffett-stock/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Even if we include this company’s hefty dividend, its shares have underperformed the S&P 500. \n\n\n\n\n\n\n\nA strong brand and huge profits can’t compensate for minimal growth prospects. \n\n\n\n\n\n\n\nShares ...</p>\n\n<a href=\"https://www.fool.com/investing/2024/06/23/want-beat-sp-500-regret-buying-top-buffett-stock/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1032955483.USD","symbol_name":"NORDEA 1 STABLE RETURN \"HB\" (USDHDG) ACC","start_time":0,"source_url":"https://www.fool.com/investing/2024/06/23/want-beat-sp-500-regret-buying-top-buffett-stock/","article_id":"2445030285","we_media_id":null,"thumbnails":["https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F781040%2Fglass-bottles-coca-cola.jpg&op=resize&w=165&h=104"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2445030285","pubTimestamp":1719141300,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"Although this business is a household name, its stock return has been disappointing.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1032955483.USD":"NORDEA 1 STABLE RETURN \"HB\" (USDHDG) ACC","SG9999014575.USD":"UOB UNITED INCOME FOCUS TRUST FUND (USDHDG) INC","SDS":"两倍做空标普500ETF","LU0048573561.USD":"FIDELITY AMERICA \"A\" (USD) INC","LU2237443382.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA USD","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","UPRO":"三倍做多标普500ETF","LU1732800096.USD":"摩根大通环球收益基金A (irc)","LU1670710588.SGD":"M&G (LUX) GLOBAL DIVIDEND \"A\" (SGD) ACC","BK4213":"石油与天然气的勘探与生产","SH":"标普500反向ETF","GDP":"古德里奇","LU2237443622.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A Acc USD","SSO":"两倍做多标普500ETF","BK4588":"碎股","SG9999011175.SGD":"Nikko AM Global Dividend Equity Dis SGD-H","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","SG9999002232.USD":"Allianz Global High Payout USD","BK4177":"软饮料","IVV":"标普500指数ETF","SG9999004303.SGD":"Nikko AM Shenton Global Opportunities SGD","LU1221951129.SGD":"NORDEA 1 STABLE RETURN \"HM\" (SGDHDG) INC","OEF":"标普100指数ETF-iShares","LU2264538146.SGD":"Fullerton Lux Funds - Global Absolute Alpha A Acc SGD","LU0175139822.USD":"AB FCP I Global Equity Blend A USD","SPXU":"三倍做空标普500ETF","VOO":"Vanguard标普500ETF","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","LU1196500208.SGD":"NORDEA STABLE RETURN \"HB\" (SGDHDG) ACC","KO":"可口可乐","SG9999014567.USD":"UOB UNITED INCOME FOCUS TRUST FUND (USD) ACC","BK4559":"巴菲特持仓","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","SPY":"标普500ETF","OEX":"标普100",".SPX":"S&P 500 Index","BK4550":"红杉资本持仓","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","LU0149725797.USD":"汇丰美国股市经济规模基金","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","LU0957791311.USD":"THREADNEEDLE (LUX) GLOBAL FOCUS \"ZU\" (USD) ACC","LU1815333072.USD":"THREADNEEDLE (LUX) GLOBAL FOCUS \"AUP\" (USD) INC","LU0795875169.SGD":"JPMorgan Investment Funds - Global Income A (div) SGD-H","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU1571399168.USD":"ALLSPRING GLOBAL LONG/SHORT EQUITY \"IP\" (USD) ACC","BRK.B":"伯克希尔B","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus","BK4504":"桥水持仓"},"translate_title":"想打败标普500吗？你会后悔购买这只沃伦·巴菲特的顶级股票","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VOO":1,".SPX":1,"SPY":1,"BRK.B":1,"GDP":1,"KO":0.9,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,"UPRO":0.6,"ESmain":0.6,"IVV":0.6},"content_text":"Even if we include this company’s hefty dividend, its shares have underperformed the S&P 500. \n\n\n\n\n\n\n\nA strong brand and huge profits can’t compensate for minimal growth prospects. \n\n\n\n\n\n\n\nShares trade at an above-market valuation multiple. \n\nInvesting in an index fund that tracks the S&P 500 has proven to be a wonderful endeavor historically. For example, in just the past decade, the Vanguard S&P 500 ETF has climbed at an annualized pace of 12.9%, which includes dividends.But some individual investors strive to outperform the broader index. To do this, it's critical to find companies that can put up strong investment returns. However, I think it's also important to ignore the ones that likely can't do this.If your ultimate goal is to beat the S&P 500, you'll probably regret buying this top Warren Buffett stock.Weak returnsInvestors looking to outperform the index should avoid buying shares of Coca-Cola (KO 0.95%). As of this writing, Berkshire Hathaway owns 9.3% of the outstanding stock of the beverage giant, worth $25 billion.Despite Coca-Cola having the Buffett-led conglomerate's vote of confidence, returns have been poor. In the past five- and 10-year periods, the stock has generated a total return of 43% and 106%, respectively. During the last decade, the S&P 500 put up a total return of 237%. Of course, historical results won't necessarily resemble forward returns. But when talking about an established business like Coca-Cola, I think it's safe to assume that investors will continue to lose to the market in the years ahead.Quenching the world's thirstCoca-Cola clearly hasn't worked out to be a successful investment in the recent past. However, there are still reasons to believe it's a high-quality business.For starters, this is one of the world's strongest brands, with a history that spans more than 100 years. By selling beloved beverages, like its flagship Coca-Cola soft drink, as well as Dasani water and Minute Maid juice, the business has certainly developed customer loyalty. This adds to its long-term durability and relevance.The company's globally recognized brand helps it stand out among the competition. It also allows Coca-Cola to raise prices for its beverages. In the first quarter of fiscal 2024 (ended March 29), the business posted a 3% net revenue jump, driven mainly by higher prices. That's admirable, as it shows that Coca-Cola can handle inflationary headwinds.Because of its strong brand that encourages customers to pay up, this business is extremely profitable. In the past decade, Coca-Cola's gross margin and operating margin have averaged a superb 60.5% and 26.4%, respectively.Consistent profits have helped Coca-Cola raise its dividend for a jaw-dropping 62 straight years. With a current dividend yield of 3.1%, it's understandable if income-seeking investors are drawn to the stock.Not a good setup for investorsAs we've seen with Coca-Cola stock's trailing five-year underperformance, a strong brand and high profitability aren't enough to reward shareholders and their portfolios. And this is likely to be the case going forward, which is why investors should avoid buying shares if they want to beat the S&P 500.Coca-Cola has limited growth prospects. Its 2023 revenue of $45.8 billion was actually lower than it was 10 years earlier in 2013. The worldwide soft drink market is extremely mature. In fact, this is an industry that expands about 3% to 5% per year, which is in line with global gross domestic product (GDP) growth. This doesn't provide a robust backdrop for Coca-Cola to meaningfully increase its sales base.As if low growth potential wasn't enough of a deterrent, shares of Coca-Cola trade at a price-to-earnings (P/E) ratio of 25.1. This represents a slight discount to the trailing five-year average, but it's a premium to the S&P 500. Investors aren't being presented with an attractive setup here.While it might seem like the smart move to automatically follow in Buffett's footsteps and own the same businesses that he does, especially one whose position is as large as this one's is, the average investor should be a bit more critical. That independent thinking will lead one to believe that Coca-Cola is a company that's best avoided.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2445030285"}