CNBC's Jim Cramer said Thursday that investors should be adding shares of Coca-Cola to portfolios.
"So far, in a very bad year for the stock market, Coca-Cola's been one of the really consistent winners out there. These guys were already putting up great numbers when inflation was insane in the first quarter," he said.
"Now that so many of their key costs have come down dramatically from their highs. … I think Coke's results will only just get better," he added.
The "Mad Money" host said that there are four reasons why he believes investors should snatch up shares of Coke. First, the company is a recession-proof play since people will keep drinking pop regardless of the state of the economy, he said.
"It's exactly the kind of company that we like here, one that makes real stuff, turns a profit, and returns those profits to shareholders via dividends and a buyback and also has a reasonable valuation versus its historic pricing," he said.
He also pointed out that Coke will benefit from the ongoing reopening of the economy since people who stayed inside during the pandemic are dining out and ordering Coke products with their meals.
Cramer also said that the company's venture into alcoholic beverages will boost its balance sheet. Coke announced a partnership with Jack Daniel's distiller Brown-Forman in June to make a canned Jack-and-Coke cocktail. The company has already launched Topo Chico Hard Seltzer and Simply Spiked Lemonade with Molson Coors Beverage.
But the top reason Coke stock is attractive is that the company seems to be overcoming inflation, Cramer said.
Coke beat Wall Street expectations on earnings and revenue in its first quarter, but saw higher costs for key supplies such as aluminum, high fructose corn syrup and plastic.
However, the price of corn has come down roughly 27% from its April highs, including around a 23% decline over the past three weeks, Cramer said. He added that aluminum is down about 41% from its peak in March.
He acknowledged that the strong U.S. dollar is still a headwind for the beverage giant.
"It means their foreign earnings translate into fewer greenbacks. Not good, but currency fluctuations are much easier for Wall Street to ignore than rampant raw cost inflation," he said.
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