As I’m sitting here today drinking my Coke Zero (trying to shed a few pounds for the summer time), I was overcome with a stroke of genius. No, I didn’t invent a new weight-loss diet. And no, I didn’t get a brain tumor from all of the artificial sweeteners. My lightbulb lit up in the shape of this week’s stock pick. As that “real coke taste” hit my lips, I knew I found a winner.
Coca Cola (NYSE:KO)
The folks over at Coca Cola are brewing up great number of investment goodies. I thought I would just mix them all randomly into a sweet concoction and if this doesn’t make your mouth water, you may want to run over to the local convenience store and buy a coke.
- Coca Cola is a steady dividend payer. Not only have they paid their dividend like clockwork, they have also raised it every year as far back as I care to look.
- Coke consistently repurchases shares, and thus, increases the value of each remaining share. Enough said.
- The product portfolio includes one particular cash cow which will likely provide a solid earnings base for eternity, Coca Cola. In fact, the customer’s affinity to this product is so great, that when they tried to change the formula they were bombarded with hundreds of thousands of calls. A psychiatrist hired by coke said some people sounded like they were discussing the death of a family member
- A number of newcomer products which provide a great opportunity for earnings/profit growth. (I stopped counting after ~200 brands).
- You can order a coke anywhere in the world. KO is a truly global company. They have perfected the art of adapting tastes to different parts of the world.
- A great opportunity in emerging markets. Many people in poorer countries walk 20 miles and spend their entire paycheck to buy just one coke per month. What do you think will happen when they can afford one coke every day?
- KO owns the beverage market and therefore has some of the same benefits as monopolies. To give you an idea of how big this lead has become, Diet Coke has now passed Pepsi to become the No. 2 soda in the US.
- A rewards program. Reward programs are addicting (just like caffeine laden soft drinks), and as the only beverage manufacturer with a rewards program, coke has a leg up.
Well, my Coke Zero is teetering dangerously close to the empty mark, so either I have to stop writing, or go grab another one.
Thousandaire Portfolio Performance Update
In case you’ve been following our stock picks, you may have noticed a trend. We consistently outperform the S&P500 at minimizing returns. You read that right. This marks our fourth consecutive month that the index has outperformed our picks. But no need to worry; our portfolio is built for the long haul, not just the first four months.
Total Investment: $4,798.00
Thousandaire Portfolio Value: $4,864.59, +1.39%
S&P 500 Index Value:$4,966.34, +3.51%
I currently do not have a position in this stock and do not plan to do so for the next 90 days.
Coca Cola is obviously a great company. Not only do they make a delicious product, but those Coke Zero commercials always make me laugh and it takes a special company to make polar bears adorable. I love them because of a 2.7% dividend yield and a truly global brand. My only concern would be if America starts taxing soda heavily because of the obesity epidemic, but even that wouldn’t be devastating for this company because it has such a global presence. Now here’s a hilarious Coke commercial in case you haven’t seen them.
Important to note that ALL ideas, thoughts, and/or forecasts expressed or implied herein are for informational and entertainment purposes only and should NOT be construed as a recommendation to invest, trade, or speculate in the markets.
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