Coca-Cola Delivered Superior Returns Compared to Domino's Pizza in 2025—What's Next for Investors?

The comparison between Coca-Cola (NYSE: KO) and Domino’s Pizza (NASDAQ: DPZ) throughout 2025 offers valuable insights into how different market dynamics shape investor returns. Last year, these two consumer staples stocks—both holdings favored by legendary investor Warren Buffett—faced different headwinds and opportunities. While neither stock significantly outpaced the broader market, their divergent performances highlight important lessons about business resilience and market sentiment.

How Coca-Cola Captured Investor Attention in 2025

Coca-Cola emerged as the stronger performer between the two, benefiting from multiple factors that aligned with market priorities in 2025. The beverage giant’s strategy of maintaining localized production facilities across global markets proved particularly valuable as tariff concerns escalated. Investors rewarded this operational approach, recognizing that distributed manufacturing capacity provides insulation against trade policy uncertainty.

In the company’s most recent quarter (Q3 2025), financial results demonstrated underlying strength. Sales increased 5% year over year, while comparable operating margins expanded from 30.7% to 31.9%. These figures reflect Coca-Cola’s demonstrated pricing power—the company successfully navigated rising input costs by adjusting prices, modifying packaging configurations, and optimizing product sizes. Beyond these immediate metrics, management continues identifying efficiency gains and expanding its portfolio through acquisitions of established global brands, which diversifies revenue streams and reduces reliance on any single market segment.

The dividend profile deserves particular attention. As a Dividend King with 63 consecutive years of dividend increases, Coca-Cola maintains a competitive 2.9% yield despite the stock’s strong performance. This consistency appeals to income-focused investors, especially as markets enter new cycles following three consecutive years of double-digit returns.

Domino’s Pizza Faces Market Skepticism Despite Reasonable Growth

Domino’s has reported comparable growth metrics to Coca-Cola, yet the market’s reception tells a different story. Global retail sales increased 6.3% year over year in fiscal Q3 2025, with comparable sales rising 5.2%—respectable numbers that should theoretically justify investor enthusiasm. However, the restaurant industry navigated substantial headwinds throughout 2025. Elevated inflation pressures persisted even for historically resilient foods like pizza, which typically maintains demand across economic cycles.

The market appears to have developed a cautious stance on Domino’s growth prospects. Unlike Coca-Cola’s structural advantages from localized production, Domino’s operates within a sector facing ongoing margin pressures and consumer spending uncertainty. The stock’s near-flat performance in 2025 contrasts sharply with its peer’s appreciation, suggesting investors currently view limited upside potential despite the company’s consistent operational execution.

One potential advantage entering 2026: Domino’s lack of appreciation in 2025 provides a cleaner technical foundation. The stock hasn’t run up as much, potentially offering fresher momentum opportunities if restaurant sentiment improves.

Valuation Comparison and the 2026 Investment Decision

The valuation gap between these stocks has narrowed slightly. Domino’s trades at 24 times trailing-12-month earnings, while Coca-Cola trades at 23 times. Though the difference appears minimal, it carries significance: Coca-Cola offers superior growth quality and defensive characteristics at a lower multiple, while Domino’s commands a premium valuation for more modest growth potential and greater sector sensitivity.

As markets enter 2026 following three consecutive years of above-market returns, the calculus may shift. Coca-Cola’s track record of reliability, dividend consistency, and operational advantages position it favorably for continuation of outperformance. However, Domino’s shouldn’t be dismissed entirely. The company’s steady expansion and underlying business quality may regain investor recognition if restaurant sector conditions stabilize.

Assessing the Long-Term Investment Picture

When evaluating stocks like Coca-Cola and Domino’s Pizza for portfolio inclusion, consider the broader context of equity market returns. Stock Advisor’s historical analysis demonstrates the power of quality stock selection over extended periods—Netflix delivered $450,256 in returns from a $1,000 investment recommended in December 2004, while Nvidia generated $1,171,666 from a similar $1,000 allocation recommended in April 2005.

Stock Advisor’s average return of 942% substantially outpaces the S&P 500’s 196% performance, illustrating that differentiated stock selection matters across market cycles. For 2026, investors must assess whether Coca-Cola can maintain its momentum or whether the market might reward Domino’s operational consistency if sector conditions improve. Both companies merit consideration based on individual portfolio objectives, risk tolerance, and expected market conditions through the balance of the year.