Key Points
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Coca-Cola is a long-time Buffett holding.
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Procter & Gamble’s goal is to lead through innovation.
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Kimberly-Clark has just changed its business in an important way.
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Coca-Cola (NYSE: KO) is an almost perfect example of Warren Buffett’s investment approach. For starters, Buffett owned it for decades while he was CEO of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB). But there’s more to the story, and it helps explain why you might also want to consider Procter & Gamble (NYSE: PG), a stock I own, and Kimberly Clark (NASDAQ: KMB) today. The key is that they all have strong businesses that sell products consumers want and need in good times and bad. Here’s a look at each one.
Coca-Cola isn’t cheap, but it’s still worth buying
Buffett liked to buy companies with pricing power, steady cash flow, and a long record of growing value. Coca-Cola, one of the world’s most important beverage makers, essentially sells expensive flavored water. While it would be easy enough for consumers to switch to free tap water during hard times, Coca-Cola’s brand loyalty is impressive. Notably, despite today’s increasingly budget-conscious consumers, Coca-Cola was able to increase organic sales by a huge 7% in the third quarter of 2026. That’s impressive consistency in the face of adversity.
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As for building value for shareholders, the best example is Coca-Cola’s status as a Dividend King, with more than 50 years of annual dividend increases. That speaks both to the company’s consistency as a business and its focus on returning value to shareholders over time. The one problem with Coca-Cola today is its valuation, with its 28x price-to-earnings ratio slightly above its 26x five-year average. Still, for more conservative dividend investors, the stock, with its well above-market yield of 2.2%, could be a good addition.
Procter & Gamble is a solid middle ground
Procter & Gamble, which I own, sells consumer products from toilet paper to over-the-counter cough medicine. It increased its organic sales by 4% in the first quarter of fiscal 2027. That’s notable strength in the face of a tough consumer market. And, like Coca-Cola, P&G is a Dividend King. Right now, the stock’s 25x P/E ratio is in line with its five-year average.
One of the things that sets Procter & Gamble apart from the competition, however, is that its products tend to sit at the high end of the market. Normally, you would expect higher-cost products to see trade down during periods like today, when customers are tightening their budgets. And yet P&G is still growing its organic sales, largely because it is focused on leading through innovation. The company believes the best way to increase prices is to provide benefits that consumers are willing to pay for. If that sounds like the kind of business you’d like to own for the long haul, you might want to add this Dividend King and its 2.5% yield to your shopping list.
Kimberly Clark is a good fit for more aggressive investors
The last stock here will be the hardest sell. Kimberly Clark is a direct competitor to P&G in the paper products sector, with products such as toilet paper, towels, and sanitary products. However, it recently bought Kenvue, which sells consumer products ranging from over-the-counter medicines to skin care. That marks a dramatic business shift and one that makes it look a lot more like P&G than it did before. And it could also change the business’s direction, turning Kimberly Clark into a more Buffett-like company.
The stock has a 4.5% yield, and its 21x P/E is in line with its five-year average. However, that P/E is lower than P&G’s 25x (and Coca-Cola’s 28x). For more aggressive investors who believe Kimberly Clark is charting a new and better course, this could be the value option on this list. And you can take some solace in the fact that, like both of the companies above, Kimberly Clark is a Dividend King. So even though it is probably a higher-risk option, you wouldn’t be throwing caution to the wind if you bought it.
Three choices that are Buffett-like for long-term investors
The real story here, however, is that Buffett bought and held for the long term to benefit from the growth of the businesses he owned. That worked out very well with Coca-Cola, and given the strong business and long dividend track records of P&G and Kimberly Clark, it could work out well for their shareholders too. And all three will pay you reasonably well via reliable dividends if you have to wait out a difficult period or two along the way.
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Reuben Gregg Brewer has positions in Procter & Gamble. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
