Coca-Cola (KO -0.92%) is a great business, but that doesn't mean it is a great stock to own. In fact, to paraphrase famous value investor Benjamin Graham, overpaying for a great company can turn it into a bad investment. If you are considering this consumer staples giant, here's why you might be better off buying something completely different.

What does Coca-Cola do?

Coca-Cola makes beverages. In fact, it is one of the largest beverage makers on the planet, with a distribution network that is top-notch, a powerful marketing team, and strong R&D skills. As a business, it is highly attractive. But what about as an investment?

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Right now, Coca-Cola's price-to-sales, price-to-earnings, and price-to-book value ratios are all above their five-year averages. It is hard to escape the fact that the stock is expensive today. If you bought it and held it for long enough, you'd probably end up OK, but overpaying could lead to some near-term trepidation if the stock's valuation reverts back toward the mean.

If you are seeking a stock that looks attractively priced, you'll be better off with The Hershey Company (HSY -1.47%). Despite material cost headwinds, this confection maker is still growing its business. That speaks to a potentially bright future if its valuation metrics return to their longer-term averages.

A look at Hershey's business and valuation

Starting with the stock price, Hershey's shares have fallen around 45% from the all-time high they reached in 2023. That has pushed the dividend yield up to a historically high 3.6%. The stock's price-to-sales, price-to-earnings, and price-to-book value ratios are all below their five-year averages. Essentially, Hershey looks cheap while Coca-Cola looks expensive.

There's a reason, of course. Hershey is facing a severe cost headwind thanks to the massive increase in the price of cocoa. Although revenue is expected to grow at least 2% in 2025, the company's adjusted earnings are projected to fall in the mid-30% range. Investors are reacting accordingly and selling the stock. But that's an opportunity for long-term growth investors.

Indeed, the current headwinds haven't stopped Hershey from growing its business. It has recently added the Sour Strips brand to its confection operation and has agreed to buy LesserEvil, which will expand its presence in the salty snack category. In other words, this food maker is taking the long view even as it deals with adversity. That, plus a strong balance sheet, should reassure investors that the currently struggling business will rebound once the cocoa market becomes more rational.

There's time, but don't wait too long

To be fair, cocoa comes from trees, so it could take a little while for commodity prices to rationalize. There's probably no rush to buy Hershey's stock. However, acting now gets you in the door and allows you to collect a historically high yield while you await better days. And you'll get to benefit from the growth via acquisition that's being hidden by the market's cocoa concerns.

If you wait too long, meanwhile, you could miss out entirely on this unstoppable growth stock. It's probably better to be a little early than miss out because you wait too long.