Is Coca-Cola a Good Investment?

OVERVIEW

The Coca-Cola Company is a company based in the United States. The company designs, manufactures, and sells beverages around the world. It operates under the popular Coca-Cola, Sprite, Dasani, Minute Maid, Costa, and many other beverage brands. The company was founded in 1886.

Why You Should?

  1. Coca-Cola is a great reopening play in an investor’s portfolio. The company sees strong demand returning for most of its products as countries around the world reopen their sporting venues, restaurants, and other large events where Coca-Cola sells its beverages. This reopening will benefit the company and its investors.
  2. Coca-Cola has great brand recognition around the world. The company has done a great job of marketing its diverse set of products to billions of people around the world Because of this market exposure, the company has many great growth opportunities and will be able to gain new customers in emerging markets. Customers will also continue to purchase Coca-Cola products.
  3. Coca-Cola is a great dividend play in an investor’s portfolio. The company has a dividend of around 3% or around $1.68 per stock. This dividend amount is great for investors looking for recurring revenue streams and will also benefit the company to gain and maintain investors within the company.
  4. The company has taken an opportunity during the pandemic to divest from brands that were not popular among consumers and reinvested into the business and other more popular brands. As the company has restructured, investors expect the company to grow faster than ever after this pandemic comes to an end.

Why You Should Not?

  1. The company faces tough competition within the beverage industry. Some of these competitors include Keurig Doctor Pepper, PepsiCo, and many others. Thus competition might hurt the company and its investors in the future.
  2. Coca-Cola has seen lackluster growth over the past couple of financial years due to changing consumer trends. Consumers started to realize the negative impacts of sugary beverages and shifted to the consumption of healthier beverages and snacks. This change in consumer trends has hurt the company and its investors in the past.
  3. The COVID-19 pandemic has hurt the company and continues to negatively markets (India, China, etc.) where the new Delta variant surges. The pandemic caused many restaurants and other large venues to be shut down, something that hurt the demand for Coca-Cola around the world. This also hurt investors in the company.

MY OPINION

I think that Coca-Cola is a great long-term investment option due to its position as a good reopening play, a good dividend play, a restructuring, as well as good brand recognition. However, tough competition, negative impacts from the pandemic, as well as changing consumer trends might hurt the company and its investors in the future.

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Aaditya Patel

Aaditya Patel

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.