I don't know how old I was when I got my first collectible item. coca cola (NYSE:KO) But it's a hobby that's been going on for decades. My love for Coca-Cola really began in the 1990s when I visited the World of Coca-Cola Museum in Atlanta. There I was able to touch more iconic red and white memorabilia than ever before.
The legendary Coca-Cola brand is reportedly recognized by 94% of the world's population. For perspective, more people recognize the Coke brand than tap water. It's almost incomprehensible how much influence this business has.
Coca-Cola is a beloved brand and a beloved brand.Investors cannot track top holdings robinhood market already. But back when it was possible, Coca-Cola stock regularly ranked among the top 100 most-held stocks on the platform, counterintuitively right next to a large number of stocks. meme stocks.
The popularity of Coca-Cola stock is surprising. Over the past decade, it has performed below average when compared to the United States. S&P500 And it's not even close.
Since Coca-Cola is so famous, people seem to want to invest in it with the expectation that it will do well. However, buying the KO stock symbol is not the only way to invest in Coca-Cola. In fact, there is more than one Coke stock, and some investors have taken advantage of one of the others and made market-destroying profits.
Another way to invest in Coca-Cola's success
Coca-Cola partners with more than 200 independent bottlers around the world to produce its beverages. One of them is Coca-Cola Consolidated (NASDAQ:Cola). Although the bottling company is Coca-Cola's largest U.S. partner, Coca-Cola Consolidated also partners with: Keurig Dr Pepper and monster beverage To distribute some of our products.
Coca-Cola's consolidated stock is a much better investment than Coca-Cola. And his 10-year chart below shows a steady rise throughout the decade, suggesting that his performance isn't just a fluke and that there's something positive going on here.
Coca-Cola Consolidated Stock's performance appears to be a direct result of operational excellence. The company was able to control more sales territories, increasing revenue. In addition, by investing in your business, you can reduce costs at the same time, resulting in large profits.
In fact, the graph below shows that the profit of Coca-Cola's consolidated stock is Operating income. In other words, the stock price is rising in line with earnings growth, which is exactly what you would expect over the long term.
Which stocks should I buy today?
In my view, Coca-Cola Consolidated Stock is clearly a better buy today compared to Coca-Cola Stock. The current operating profit margin is 13.1%. By the way, just a few years ago he was below 10%. The company has been working hard to improve its profitability, and management believes it can maintain its profitability growth. In other words, investors can expect high profitability going forward.
The increase in profitability has had a phenomenal impact on Coca-Cola Consolidated's balance sheet. For the first time in 40 years, cash exceeded debt.
Furthermore, Coca-Cola's consolidated stock is cheap relative to its earnings. As of this writing, the company has a market capitalization of $8.4 billion, but its trailing-twelve-month operating profit was $712 million. Relatively speaking, this is a large profit relative to the company's value, and the stock price is well-positioned to benefit.
Coca-Cola Consolidated pays a quarterly dividend of $0.50 per share, which seems laughably low considering the stock price is over $900 per share. However, the company has paid special dividends for two consecutive years, including last year's special dividend of $16 per share.
Therefore, Coca-Cola Consolidated strives to reward its shareholders. And I expect that to continue as that profit continues to flow in over the next few years.
To be fair, Coca-Cola Consolidated's growth may be limited to some extent because it has a limited distribution territory to control. There is also a limit to how much the operating profit margin can be raised. Therefore, investors should not expect earnings to grow as they have in recent years.
However, Coca-Cola Consolidated stock is cheap, and there are options when it comes to returning cash to shareholders. Therefore, we think this stock has the potential to be a solid part of your stock portfolio.
Should you invest $1,000 in Coca-Cola Consolidated right now?
Before buying Coca-Cola Consolidated stock, consider the following:
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John Quast has no position in any of the stocks mentioned. The Motley Fool has a position in and recommends Coca-Cola Consolidated and Monster Beverage. The Motley Fool recommends the following options: His January 2024 $47.50 long call on Coca-Cola. The Motley Fool has Disclosure policy.
Coca-Cola is one of the most beloved brands on the market. But savvy investors are looking to take advantage of lesser-known Coke stocks for even bigger gains. Originally published by The Motley Fool
