(Note: The author of this fundamental analysis is a financial writer and portfolio manager. He and his clients own shares of GOOGL.)

Investors have an infatuation with stocks that are out of shape in 2017. For example, take Coca-Cola Co. (KO), whose shares have rallied by nearly 14.5 percent in 2017, primarily in line with the S&P 500 Index's return of about 15 percent.

But a recent Barron's article notes that Wells Fargo sees shares of the soft drink maker rising to $51, a level that would make Coca-Cola stock too expensive. In fact, even at current levels of $47, Coke shares are too expensive. 

There are plenty of ways to build an argument for why owning Coke is likely to return nothing but frustration. The core business operates in a segment that is out of favor and is unlikely to return to favor anytime soon.

Declining Revenue

Wall Street consensus estimates show that Coke's revenue is expected to fall by 12.6 percent in 2018, to about $30.68 billion. Coke has seen revenue declining on a trailing 12-month basis since the fourth quarter of 2014.

You have to ask yourself if you really want to own a company with falling revenue that's trading at 24 times one-year forward earnings at its current price of about $47.50.

KO Revenue (TTM) Chart

Expensive Shares

Would it not be better to own Facebook Inc. (FB), which is trading at 27 times one-year forward earnings and growing revenue at an expected rate of 32 percent? How about Alphabet Inc. (GOOGL)? That's trading at 24 times earnings and has an expected revenue growth rate of 19 percent.

Microsoft Corp. (MSFT) trades at just 22 times forward earnings while growing revenue at 8 percent. Why even bother with Coke is the real question.

KO PE Ratio (Forward 1y) Chart

Dividend Yield Doesn't Help

Some will argue that Coke comes with a dividend yield of 3.08 percent, which a good return in a low-interest rate environment. Meanwhile, a 10-year Treasury yields a rate of 2.35 percent. (See also: Why Dividend Stocks Are Killing Growth Stocks in 2017.)

Then again, Cisco Systems Inc. (CSCO) generates a yield of 3.33 percent while its dividend has grow at a faster pace than Coke during the past five years. Cisco currently has a quarterly dividend of $0.29 versus Coke's $0.37. 

KO Dividend Chart

Not Great For Safety Either

The one advantage to Coke is that its shares carry a lower beta, meaning they should less have volatility than the S&P 500 Index. But is that worth paying a growth-like multiple for a utility-like beta?

National Grid PLC (NGG) carries a much lower beta than Coke while offering a much higher dividend yield. And it comes at a much cheaper earnings multiple. 

KO Beta (3Y) Chart

The market has a thing this year for out-of-shape of stocks like Coca-Cola. Just take a look at McDonald's Corp. (MCD) if you want more proof.

Michael Kramer is the Founder of Mott Capital Management LLC, a registered investment adviser, and the manager of the company's actively managed, long-only Thematic Growth Portfolio. Kramer typically buys and holds stocks for a duration of three to five years. Click here for Kramer's bio and his portfolio's holdingsInformation presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future performance.