Sugar abuse doesn't have a detrimental effect on your investment portfolio. Of course, only if you diversify it with various types of assets, economic industries, and regions. When it comes to Coca-Cola stock, sugary (or sugar-free) drinks might even contribute to your profitability. Let’s investigate whether these shares are as much of a hit in the stock market as in real life.
If you check how Coca-Cola stocks have been doing this year, you will see a result you probably won’t like. Since the beginning of 2023, the shares have dropped by 5%. This could be attributed to the overall stock market conditions, but at the same time, the S&P 500 index has increased by 10%.
Well, sometimes you have to stand back to appreciate a work of art, as Marge Simpson said, and the same can be applied here. Coca-Cola is one of those legendary companies whose stock has consistently grown throughout its history since going public. The following chart illustrates Coca-Cola's growth over the past five years. Also, one should pay attention not only to the final percentage but to interim ups and downs – they present opportunities for successful trades. To find such opportunities, you can use special trading tools, like the economic data calendar, which helps you monitor major economic events that may affect the markets.
The determining factor for Coca-Cola lies in its widespread recognition. Whether it’s Trucks in Christmas TV ads, partnerships with the FIFA World Cup, the best (or the worst) mixer for whiskey, delightful diet beverages – everyone has their own association.
This brand is on a par with Apple, McDonald’s, MasterCard, and other industry titans. In other words, Coca-Cola is a company with a large and loyal customer base. People consistently purchase Coca-Cola’s products, even if the price increases or other factors come into play, dedicated Coke lovers will continue sweeping fizzy drinks bottles off the shelves. At most, they may opt for Sprite or Fanta as occasional alternatives (which are also Coca-Cola products).
Moreover, the company still has room for expansion. Coca-Cola introduces unique-flavor beverages in separate regions, enters new markets, and diversifies its product range, including non-carbonated drinks, juices, alcoholic beverages, coffee, and tea.
Financial reports also contribute to the positive sentiment among market participants. Post-pandemic results indicate steady growth in revenue, surpassing even pre-pandemic levels by 15% in 2022. Plus, it's worth noting that Coca-Cola has been paying dividends for 60 years. As you can see, the word “stability” is in the company’s genes.
The consensus forecast for Coca-Cola stock further supports this stability, with an increase of 17% over the next 12 months. But it's important to remember that doing your own analysis before every trade is crucial. Otherwise, it might turn out that searching for prizes under the lid of Coca-Cola bottles yields greater profits.
