Why is Coca-Cola a good investment?
Key Points. Coca-Cola stock has generated a total return of 10% in 2024. The company pays a higher-than-average dividend yield of 3%. The stock trades at a price-to-free-cash-flow ratio of 27.6.
It's a Dividend King
Those annual dividend hikes will also help its investors stay ahead of inflation while compounding their returns. If you had reinvested Coca-Cola's dividends back over the past 40 years, you would have generated a total return of 13,340%.
CocaCola Company (The) - Hold
Valuation metrics show that CocaCola Company (The) may be overvalued. Its Value Score of D indicates it would be a bad pick for value investors. The financial health and growth prospects of KO, demonstrate its potential to underperform the market. It currently has a Growth Score of D.
Investment Thesis
Coca-Cola's strong brand equity, marketing, research and innovation have helped it garner a market share of more than 40% in the non-alcoholic beverage industry.
As of 2024-07-24, the Fair Value of Coca-Cola Co (KO) is 30.82 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 64.96 USD, the upside of Coca-Cola Co is -52.6%.
Now in its 62nd year of consecutive dividend raises, Coca-Cola pays a quarterly dividend of $0.485 per share, which shakes out to an annual yield of 3%. Considering the S&P 500 yields approximately 1.3%, the beverage giant is a favorite stock for income seekers.
While Coca-Cola can offer certain benefits such as quick energy, digestive aid, and a temporary boost in cognitive performance, it is important to understand these benefits should be considered within the context of an overall balanced diet.
Purchasing power: As one of the largest companies in the world, Coca-Cola has significant purchasing power, which allows it to negotiate lower prices for raw materials, packaging, and other inputs. This can result in lower production costs and higher profits. This is also known as monopsony power.
Few companies can boast the tremendous success and growth that The Coca-Cola Company has enjoyed for over 135 years. This accomplishment can be attributed to industry-leading advertising, innovation of their products, and delivering a positive brand message.
The only downside to Coca-Cola stock is that overpaying for it can hurt your investment returns. While Coca-Cola is consistent, growing at a mid-single-digit pace makes your price critical because the company won't quickly outgrow a premium paid for the stock.
Why is Coca-Cola a better investment than Pepsi?
Better dividend growth.
Coca-Cola has raised its dividend by an average of just 3.3% per year during that time. As for growth, Pepsi reported 6% sales growth and 2% earnings growth in fiscal 2023; co*ke's 2023 sales were also up 6%, while EPS increased 13% from the previous year.
determined that Coca-Cola was a good company, had great value, could withstand competition, and was poised to recover. The Coca-Cola stake marked a significant change in Buffett's investing philosophy.
The mini cans and bottles allow Coca-Cola to save money on aluminum and glass, most or even all of which it pockets. Look no further than the pricing of its different offerings for evidence. A quick search on Amazon — and a bit of simple math — shows the premium consumers have to pay for the smaller cans.
The Company's equity method investments include, but are not limited to, our ownership interests in Coca-Cola European Partners plc ("CCEP"), Monster, AC Bebidas, Coca-Cola FEMSA, Coca-Cola HBC AG ("Coca-Cola Hellenic") and Coca-Cola Bottlers Japan Holdings Inc.
- Broadening our distribution while being more efficient...
- Joining forces with our customers to deliver flawlessly...
- And winning the trust of our stakeholders and consumers.
Intrinsic Value. The intrinsic value of one KO stock under the Base Case scenario is 54.75 USD. Compared to the current market price of 65.81 USD, Coca-Cola Co is Overvalued by 17%.
The soda maker is still a great evergreen investment. Coca-Cola (KO 0.95%) is often considered a safe blue chip stock. It owns the world's top soda brand, it generates plenty of cash, and it pays consistent dividends.
You would have more than doubled your money, with a total investment worth of $2,029.55. That's a 103% return, or a 7.23% annual rate of return.
Coca-Cola Co has the Financial Strength Rank of 6.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is.
Despite safety concerns and illegality, the coca leaf is used to make medicine. People chew coca leaves to relieve hunger and fatigue and to enhance physical performance. Coca extracts are used for stimulating stomach function, causing sedation, and treating asthma, colds, and other ailments.
What are the advantages of Coca-Cola company?
Coca-Cola has several advantages that contribute to its success. One advantage is its ability to satisfy customers more than its competitors, which gives the company a comparative advantage 1. Another advantage is Coca-Cola's strong brand image, which helps consolidate customer loyalty and enhances market stability.
Does Coca-Cola offer medical benefits? Yes, Coca-Cola offers medical, dental and vision insurance. You can choose from 3 plans, with maximum out of pocket costs from $3000 to $25600.
Coca-Cola's 1899 licensing agreement formed the basis of a unique distribution system that now characterizes most of the American soft drink industry. Independent bottlers produce and package the products and distribute them locally.
Strategic goals of the Coca-Cola Company
Moreover, its overall main objective is claimed to be growing the company, the industry, and crafting brands and drinks that people love. In 2021, Coca-Cola set up a pipeline to assess its level of innovation. The goals of the pipeline included gaining new drinkers.
The company's superior performance in terms of product, price, place, and promotion compared to its main competitor, Pepsi, further contributes to its competitive advantage . Furthermore, Coca Cola's dominance in the cola market, with a higher market share than Pepsi, solidifies its competitive position .
