When most people are new to stock investing, they will think of the big household names that they already know. One of the biggest companies in the world is Coca Cola. This article will discuss the advantages and disadvantages in investing in such a well known company.
Coca-Cola is a multinational company producing one of the world’s most popular beverages. The company produces lots of different products, with its best known being Coca Cola. This was developed in 1886 and later sold in 1889 to Asa Candler. Coca Cola also owns over 500 different brand names in over 200 countries worldwide. It is estimated that coca cola is responsible for serving 1.7 billion cups of beverages per day.
Coca Cola uses a franchised system for distribution. This system has been in use ever since 1889 when the company was first incorporated. Coca Cola produces the syrup using a top secret recipe. This is then sold to bottlers which are located in different parts of the world, each of these bottlers own the territory in which they are located.
The company has its headquarters in Atlanta, Georgia. It is floated on the New York Stock Exchange (NYSE) and also makes part of the Russell 1000 Index, Russell 1000 Growth Stock Index, DJIA and S&P 500 Index.
How much is Coca Cola Stock
Coca Cola stocks are very valuable, at the time of writing they are around $74 per share, and this gives the company a total market capitalization of about $167 billion. This means that they are the biggest soft drinks company in the world and are still slightly larger than Pepsi.
Coca Cola Stock Market Chart
Price History of Coca Cola
Coca Cola stock is popular with investors because it is quite a stable investment. This means that even during periods of economic crisis, the stocks do not lose much value. The prices fell slightly during the last recession, but after the market has recovered the shares returned to higher than their original value.
The reason that Coke shares remain fairly stable is because coke is not a luxury purchase. Most people will continue to buy Coke regardless of the state of the economy. The stock only suffers slightly during a recession when people cut down on non essential purchases.
Public Limited companies such as Coca Cola have a certain number of stocks (or shares) which can be bought and sold. The set number of shares will dictate the value of the company. The board of directors of a company can decide to increase the number of shares by splitting the stock. A 2 for 1 split would mean that for every share an investor has, they will be given another one. This will literally halve the value of each share, but keep the investor’s investment the same.
Coca Cola has split stocks five times in its history. The first split was in 1977 and was a 2 for one split. The most recent split was a 2 for 1 split which was completed in 1996.
The last coca cola split was over 16 years ago. As the current share price is lower than at this time it is very unlikely that coca cola will decide to split again in the near future. Of course, if the price of the stocks does increase to very high levels, then a split may be considered by Coca Cola.
Anyone interested in investing in stocks of a company will need to look at the possibility of receiving dividends. Coca Cola currently pays a quarterly dividend for the past year, this has a yield of 2.8%. Although this is lower than other years it is thought that the level of dividend will increase when the market starts to recover.
So Should I buy Coca Cola Stocks?
Now we come to the most important part of the article, should you consider buying stocks in Coca Cola. Well, the answer is that it’s up to you. It does seem to be a very reliable and stable investment. The income has been increasing fairly steadily over time and the future expansion looks good. However, it’s also worth noting that the costs are also increasing.
Although the rising cost is due to increased output, the cost of raw materials such as sugar are also increasing. These increasing costs are likely to start affecting the profit margins and so the value of the stocks of the company eventually.
As coca cola uses a franchise model to distribute the drinks, this means that they are able to react quickly to changes in demand. Coca Cola is a very strong and reliable investment. Coca Cola finds it very easy to enter new markets and adjust recipes for each market if required.
If you are interested in buying stock in Coca Cola then you should take your time and make sure you get the very best deal. Choose a very good broker to make sure that you’re getting a fair deal.