It's been a long time since the Dow Jones Industrial Average primarily tracked industrial companies, and Coca-Cola (KO 0.05%) remains a top Dow Jones stock that has consistently outperformed the bulk of other choices on the popular index during economic turmoil.

With the Fed continuing to raise interest rates and a recession a real possibility, an investment in a safe Dow Jones leader could lead to strong returns.

The international appeal of a strong beverage portfolio

Coca-Cola has over 200 distinct brands. Its diverse array of iconic soda and juices along with coffee and even alcoholic beverages is available worldwide. That product diversity helped the company deliver better-than-anticipated 16% organic revenue growth in its latest earnings report, in July, and show great resilience as the pandemic recovery continues. 

Sales in India, Mexico, and Brazil grew 8% for sparkling soft drinks. Its hydration products, including Dasani water, Powerade, and newly acquired BodyArmor, grew by 7% with market share gains in Latin America, Europe, the Middle East, and Africa. Tea saw 4% growth with sales gains in Japan, Brazil, and Western Europe. The Costa brand continues to grow worldwide, and combined with other coffee offerings, this segment expanded sales by 15%.

Beating the bears

History shows the safety of Coca-Cola as a Dow Jones leader. The stock debuted at $40 per share in 1919, which might seem high, but it has split 11 times in the intervening years. It's also a Dividend King, having raised its payout annually for more than 50 straight years.

During the Great Recession, shares fell to lows of around $20.60 per share before rebounding. They recovered quicker than the Dow Jones as a whole, reaching previous recent highs as soon as December 2010. When the pandemic sent share prices plummeting from about $60 to $38.30, Coca-Cola proved its resilience once more, recovering within a calendar year.

When markets go flat

That's not to say things will be as smooth as a bottle of Vitaminwater for the industry giant. Many headwinds exist outside of global markets. Negative reports regarding the amount of waste produced by Coca-Cola products could damage its public image. It was this concern that drove the company to invest heavily in "a circular economy" that includes recyclable bottles and to further its World Without Waste project globally.

PepsiCo continues to nip at the heels of the beverage market leader, with a market cap of $236 billion compared to Coca-Cola's recent $273 billion figure. Its expansion into a variety of shelf-stable foods and pantry essentials continues to drive the company's success, but that added diversity could draw resources away from its battle to take more of Coca-Cola's share of the beverage market.

Over the last six months, both companies beat the Dow Jones Industrial Average, but Coke did so by 5.6% versus PepsiCo's 1.3%.

Coca-Cola's latest earnings report showed overall operating margins down by a full percentage point (from 31.7% to 30.7%) year over year. This seems more likely due to inflation and increases in logistic and delivery costs than to market slippage, as demand numbers remained favorable. The BodyArmor acquisition largely accounts for the difference in figures.

Always Coca-Cola

Sales continue to surge amid the ongoing pandemic. The stock's continued resilience in the face of economic downturns might make it a solid recession-resistant pickup in uncertain times. A savvy investor considers many factors to decide if a recession feels like the right time to invest in a company. And the latest earnings report and historical evidence suggest Coca-Cola has what it takes for a quick recovery.