Why Coca-Cola is a good investment?
And Coca-Cola's dividend is a compelling reason to buy and hold shares. The company has increased its dividend annually for an impressive 61 consecutive years, and possesses a solid yield of 3% at the time of this writing.
Its dividend pedigree is second to none
You can certainly find higher-yielding stocks. Look beyond the current yield, though. Coca-Cola has paid dividends like clockwork for decades and has raised its payment every year for the past 61 years.
Is Coca-Cola stock a Buy, Sell or Hold? Coca-Cola stock has received a consensus rating of buy. The average rating score is A1 and is based on 38 buy ratings, 9 hold ratings, and 0 sell ratings.
Better dividend growth.
Coca-Cola has raised its dividend by an average of just 5.6% 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.
In the last 30 years, shares of the beverage giant have produced a total return (including dividends) of 1,130%. That lags the gains for the broader S&P 500. And yet, over the very long term, this top beverage stock has made for a solid investment.
So, Why is Coca-Cola so Successful? 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.
Coca-Cola stock has lagged the market recently, but the company still has strong fundamentals. The soft drink giant generates robust free cash flow and returns most of that cash to shareholders through dividends and buybacks.
Our stock is listed and traded on the New York Stock Exchange under the ticker symbol KO.
The Coca-Cola stock holds a buy signal from the short-term Moving Average; at the same time, however, the long-term average holds a general sell signal. Since the longterm average is above the short-term average there is a general sell signal in the stock giving a more negative forecast for the stock.
The brand co*ke is owned by The Coca-Cola Company, along with numerous other soft drinks. In terms of overall size, PepsiCo has a market capitalization (the value of all outstanding common shares) of $232 Billion USD while the Coca-Cola Company has a market capitalization of $256 Billion USD.
Who is more profitable co*ke or Pepsi?
Both companies remain solid in their financial performance, but Coca-Cola is leading in profitability margins and liquidity, while PepsiCo has had faster near-term growth.
Coca-Cola's financials seem to be stronger
In Q2 2023, Coca-Cola made around $12 billion in revenue, more than $10 billion less than PepsiCo made. Despite the gap in revenue, both companies are similar in net incomes, which is a testament to Coca-Cola's profit margins. PEP Revenue (Quarterly) data by YCharts.
Gross profit in the fourth quarter of 2023 was $641 million, an increase of 7% versus the fourth quarter of 2022. Gross margin in the fourth quarter of 2023 improved by 120 basis points(a) to 39.3%. Income from operations for fiscal year 2023 was $834 million, up $193 million, or 30%, versus fiscal year 2022.
Coca-Cola sees annual adjusted profit to be between 4% and 5%, compared to LSEG estimates of a 4.5% growth. Its net revenue rose 7.4% to $10.95 billion beating expectations of $10.68 billion while adjusted profit of 49 cents came in line with estimates.
Con: The Soda Slide
Perhaps the largest concern that investors have about KO stock is the fact that people are simply turning away from soda and sugary drinks. Coca-Cola's most recent earnings reports prove that people are buying fewer sugary drinks and most analysts believe that trend is going to continue.
One of the things that made Coca-Cola such a runaway hit is to be found in the name itself. “Cola” is derived from the fact that the drink got its distinctive brown coloring and much of its taste from the kola nut. Coca, on the other hand, would turn out to be the real clincher when it came to ensuring product loyalty.
Latest Sustainability News
Make 100% of our packaging recyclable globally by 2025— and use at least 50% recycled material in our packaging by 2030.
Coca-Cola has demonstrated strong growth in revenue and profit in Q4 2023 and throughout the year. The company expects further revenue growth of 6% to 7% in 2024. Coca-Cola remains dedicated to enhancing shareholder value through dividends and share repurchases.
The ownership structure of Coca-Cola Bottling Co Consolidated (co*kE) stock is a mix of institutional, retail and individual investors. Approximately 32.25% of the company's stock is owned by Institutional Investors, 37.60% is owned by Insiders and 30.15% is owned by Public Companies and Individual Investors.
co*ke is projecting organic sales growth of between 6% and 7% (compared to Pepsi's 4%) for 2024. The company is also expecting earnings gains to outpace revenue growth, likely keeping co*ke's profit margin close to its current impressive rate of nearly 30% of sales.
Should you invest in co*ke or Pepsi?
Pepsi is the cheaper stock, but investors might still prefer paying the premium for co*ke over its less expensive rival. Sure, you can own Pepsi for 2.5 times sales, or less than half of co*ke's price-to-sales (P/S) ratio of 5.6. You'll get roughly the same 3% dividend yield in either case.
Largest shareholders include Berkshire Hathaway Inc, Vanguard Group Inc, BlackRock Inc., State Street Corp, VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, VFINX - Vanguard 500 Index Fund Investor Shares, Jpmorgan Chase & Co, Geode Capital Management, Llc, Fmr Llc, and Morgan Stanley .
Instead, the trust owns concentrated stock positions in less heard of companies, like Coca-Cola FEMSA, which is a Mexican bottler of popular soft drinks. There is also an environmental theme that can be found within the portfolio, with top holdings including Ecolab, Waste Management, and John Deere.
Quarterly / Full-Year Performance
- Revenues: For the quarter, net revenues grew 7% to $10.8 billion, and organic revenues (non-GAAP) grew 12%, driven by 9% growth in price/mix and 3% growth in concentrate sales.
Coca-Cola Co.
(NYSE:KO) is one of the most popular recession-proof stocks in the U.S., with an attractive dividend payout history. The Dividend Aristocrat pays $1.84 in dividends annually, yielding 3.09% on its current price.
