Could investing $10,000 in Coca-Cola make you a millionaire?

With a sales presence in more than 200 countries and territories across the globe, as well as leading beverage options such as its namesake soft drink, Dasani water and Powerade sports drink, among many others, Coca cola (K.O -0.99%) is definitely a household name. Its success and long-term relevance have helped create a business that is currently worth $309 billion.

But they could invest $10,000 today in this top stock of drinks does it finally make you a millionaire? Read on to learn more about the merits of investing in Coca-Cola.

Coca-Cola is a high quality business

One of the key reasons why this company is probably on your radar is that it is a high-quality enterprise. For starters, Coca-Cola owns one of the strongest and most recognizable brands in the world. It has been developed over more than a century of customer satisfaction and consistent product delivery.

Of the company brand ditch helps support its pricing power. Just last quarter (the second quarter ended June 28), Coca-Cola posted a 3% increase in net income, but that was offset by more favorable pricing actions taken by the management team. Customers certainly have loyalty to the company’s products.

I will also draw attention to the financial situation of Coca-Cola. This is an extremely profitable business. Over the past decade, the operating margin has averaged 26.6%. This results in tremendous free cash flow that supports a consistent dividend (more on that below).

Coca-Cola operates in a mature, dull and stable industry. The smartest and most well-funded entrepreneurs don’t really work hard to disrupt the market. But that’s a good thing. It means that this business faces almost no threat of disruption. If we look 50 years from now, there is a very high probability that Coca-Cola will still be at the top of the industry.

Not many investors would argue against the view that Coca-Cola is a wonderful business. Even Warren Buffett agrees. Berkshire Hathawaythe massive conglomerate he runs owns 9.3% of the beverage giant’s outstanding shares. It has been a portfolio position for a very long time and generates huge dividend payments every year. This certainly gives a stamp of approval for anyone looking to pick up Coca-Cola stock.

Coca-Cola’s turnaround potential

Coca-Cola’s high level of consistent profitability supports its 2.7% dividend yield. The business has effectively increased its payout for an astonishing 62 consecutive years. Consistent dividends provide investors with a steady source of income. And this adds to the stock’s return potential.

However, another factor to consider is valuation. At the time of this writing, the stock is trading at a price-to-earnings ratio of 29.1. This represents a premium over the past five years’ average. And it’s 21% more expensive than the total S&P 500 index.

Paying the current valuation makes sense, but only if you believe Coca-Cola will grow its profits rapidly in the future. It’s easy to be skeptical about this. Over the past decade, its earnings per share have grown at an annual rate of just 2.7%. This is a low-growth business operating in a very mature industry. Therefore, investors need to be careful where the profits from owning these stocks will come from.

Over the past five years, Coca-Cola has produced a total return of 54%. For comparison’s sake, the S&P 500 would have doubled your initial equity investment. I see no reason to expect the underperformance of S&P 500 companies to change as we look ahead.

Assuming Coca-Cola’s 9% annualized return over the past five years continues indefinitely, it would take more than 50 years for an initial investment of $10,000 to turn into $1 million. So it’s probably best for investors to look elsewhere if the hope is to reach the seven-figure club in a more reasonable time frame.