Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Coca-Cola Company (KO): This Beverage Company Is A Perfect Example Of A Solid Long-Term Investment

Page 1 of 2

When I talk to my investing friends, most of whom are 30-something professionals, we like to swap our latest picks. Invariably, most of what I hear about is the latest speculative names, such as how an investment in HEMP, INC. (PINK:HEMP) is going to put my grandkids through college . Even the more “conservative” of the bunch will say things like “Google Inc (NASDAQ:GOOG) is going to $1000 this year! I’m putting half of my savings in it!”

While this may very well be the case, Google could just as easily fall back to $600 a share after a mediocre earnings report. Hemp, Inc could make its investors rich, but I give that a 5% chance of happening–and that is being generous. Nobody should be willing to lose 25% or more of their long-term savings, no matter how good the potential rewards may be.

When I tell my friends to put a substantial chunk of their savings in an established giant dividend-payer like The Coca-Cola Company (NYSE:KO), they laugh and tell me about my “boring” portfolio. While I agree that it is fine to speculate a bit with some of your discretionary cash (I certainly do), Coca-Cola is the perfect example of a stock that you should hold for the long term. And 9 times out of 10, these “boring” stocks outperform their exciting counterparts over the long term.

About Coca-Cola

The Coca-Cola Company (NYSE:KO)

As most people already know, The Coca-Cola Company (NYSE:KO) is the world’s largest soft drink company, with sales of almost $50 billion per year. Their products are now sold in more than 200 countries, and they own (or license) over 500 brands. Despite this last fact, I believe there is still room for Coca-Cola to grow, particularly internationally, since over 44% of the company’s revenue still comes from North America. Compare that with the 11.7% of revenues that come from Asia, despite their massive population, and it’s easy to see potential here.

Over the long term, few stocks have had the consistent performance of Coca-Cola. They excel at two areas that long term investors love: dividends and buybacks. As far as buybacks go, over the past two years alone the company has reduced the amount of outstanding shares from 4.67 billion to 4.48 billion, a 4.1% reduction. The Coca-Cola Company (NYSE:KO) also pays a nice dividend of almost 3% currently, and it has raised the amount of the dividend every year in recent history.

With its record of stability and returns, it is no wonder that Coca-Cola trades at a premium to many other companies. Currently trading for 20 times TTM earnings, analysts are projecting an average annual earnings growth rate of 9% going forward. Again, this multiple seems a bit high; however, this kind of rock-solid investment is hard to come by these days, so investors are willing to pay a premium for it.

Page 1 of 2

Biotech Insider Alert - $5 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!