Think it’s too late to buy Coca-Cola stock? Here is the biggest reason why there is still time.

Titan drink Coca cola (K.O -0.48%) is on the roll. The stock is trading near all-time highs after gaining 22% in 2024.

The steep price increases caused many investors to stop and reconsider their Coke stock. Is there room for further upside right now, or is it too late to invest in Coca-Cola stock today?

I see many reasons to get into Coca-Cola stock today. Active growth catalysts include marketing and distribution campaigns based on artificial intelligence (AI) analytics, the reformulation and relaunch of many popular beverage brands in specific markets around the world, and innovative partnerships with other well-known brands.

Coca-Cola’s marketing efforts are also quite effective. Trailing-twelve-month sales have grown 12.5% ​​over the past two years, and the company is achieving this growth while maintaining market-leading profit margins.

Coca-Cola’s recipe for success: Unbeatable profit margins

That’s the point here. Whether you look at fundamental gross margins or efficiency-based operating margins, Coca-Cola leaves its main rivals PepsiCo (PEP -0.63%) and Keurig Dr Pepper (KDP 0.20%) long ago Coca-Cola also doubles the free cash flow margins of second-place Keurig Dr. Pepper:

KO gross profit margin data by YCharts. TTM = last 12 months.

As you can see in the charts above, Coca Cola’s rivals are eating dust. Keurig Dr. Pepper is gaining ground, but it still has a long way to go. Pepsi’s capital-intensive business model was not designed for high-margin operations.

Coca-Cola’s undisputed profit margins demonstrate that the company has a high-quality business plan with strong pricing power and a top management team. Top-line growth and industry-leading margins should remain intact for years to come, fueled by an open approach to new ideas such as AI tools and new flavor recipes.

So Coke stock is selling at a slight premium to Pepsi or Keurig Dr. Pepper, but for all the right reasons. You should pay a little more for a true market leader. If you buy some Coca-Cola stock today, you should be able to hold it for decades with good results.