Is the king of all drinks a good dividend? The ubiquitous Coca-Cola Company (NYSE: KO) shows stability and has established itself as one of the most recognized brands in the world. The products the company creates have created extreme customer loyalty over time.
But is it a good dividend? Let’s take a look at the history of Coca-Cola, the reasons why it makes a good dividend in shares and how to buy shares of the soft drink giant.
History of the Coca-Cola stock
How did Coca-Cola, one of the most famous beverage companies in the world, start?
The giant event began with just one product in 1886, in Atlanta, Georgia. Dr. John Stith Pemberton, a local pharmacist, produced the Coca-Cola syrup. He took him to Jacobs’ pharmacy, paired him with carbonated water, and sold him the glass for five cents. He sold a small number of drinks a day – only nine glasses.
Pemberton never realized the potential of his invention. He sold the Coca-Cola recipe to Asa Griggs Candler, a business tycoon and American politician, for only $ 238.98 in 1888. Candler founded The Coca-Cola Company in 1892. In 1919, a group of entrepreneurs led by Ernest Woodruff bought The Coca-Cola. Cola Candler Company for $ 25 million. That same year, Coca-Cola made its initial public offering (IPO) on the New York Stock Exchange (NYSE), for $ 40 per share.
Since then, Coca-Cola Company has grown to include more than 3,800 brands worldwide.
The Coca-Cola Company, still based in Atlanta, manufactures and sells the following:
- Gas refreshments
- Flavored and enhanced water
- Sports drinks
- Juices, dairy and beverages of vegetable origin
- Tea and coffee
- Energy drinks
- Concentrated drinks and syrups
- Fountain syrups for fountain retailers
The company’s brands include more than Coca-Cola, Diet Coke / Coca-Cola Light and Coca-Cola Zero Sugar. Its brands also include Fanta, Fresh, Schweppes, Sprite, Aquarius, Ciel, Dasani, Ice Dew, Powerade, Minute Maid, Costa, FUZE TEA, Georgia and Gold Peak.
In the first quarter of 2022, The Coca-Cola Company’s net revenue grew 16% to $ 10.5 billion and organic revenue grew 18%. The company earned a share of value in the total of ready-to-drink non-alcoholic beverages (NARTD). Cash flow from operations was approximately $ 620 million, a decrease of $ 1 billion from the previous year. Free cash flow (non-GAAP) was approximately $ 400 million, a decrease of $ 1 billion from the previous year.
During the first six months of 2022, Coca-Cola shares rose 6.3%, despite a market devastated by inflation and despite being severely affected by the pandemic, which closed restaurants and other places that carry their brands . In comparison, the S&P fell 20.5%, showing evidence of a brand capable of overcoming any storm that appears in its wake. In short, the Coca-Cola Company is a big dividend.
Reasons why Coca-Cola (NYSE: KO) does a good dividend action
Coca-Cola Company’s most recent dividend was 44 cents per common share, payable on July 1, 2022 to registered shareholders on June 15, 2022. The quarterly dividend increased approximately 5% from 42 cents in 44 cents since last dividend. to increase.
Currently, the price of Coca-Cola shares is $ 62.74 on July 7, 2022. He is also a headliner of Warren Buffett: he first bought the shares in 1988 and remains in fourth place. largest of your company.
Coca-Cola remains a member of the Aristocratic Dividend, which means it has increased its dividend for 60 consecutive years, a promising return for dividend investors.
You may be wondering if market share will start to decline over time due to people’s propensity to revert to healthier alternatives. However, Coca-Cola has begun expanding into African and NARTD brands worldwide, despite declining sales of sugary beverages. As consumers continue to make healthier choices, Coca-Cola may begin to create sugar-free carbonated soft drinks.
How to buy Coca-Cola stock
Let’s take a look at how to buy shares of Coca-Cola Company if you are interested in the returns on investment.
Step 1: Choose an intermediation.
Do you have a brokerage account? If not, you will need to choose the right brokerage for you. This may involve buying reasonable commissions, few additional commissions, low account minimums, a platform, and easy-to-use features. Your choice of broker should reflect your investment style. Do you prefer to trade stocks or do you like the idea of a buy and hold approach? Many dividend investors choose a buy and hold approach to reaping the benefits of long-term dividends. If your strategy involves taking a Buffett approach to dividend investing, you may want to choose a broker that is friendly to buy and hold.
Step 2: Decide how many shares you want to buy.
How much do you plan to invest? Your best bet is to prepare a budget for the number of shares you want to buy and then invest accordingly. For example, if you have $ 1,000 you want to invest, start here instead of how many stocks you want to have. Divide the $ 1,000 you have available to invest by the current price of Coca-Cola shares. Your broker can allow you to buy split shares. This means you can buy partial shares.
Suppose when you actually buy it, the price of The Coca-Cola Company shares is $ 60.10 and you want to buy shares worth $ 1,000. In this case, you can buy 16.64 shares of the stock.
Step 3: Choose your order type.
Your trading platform will offer you several types of orders to choose from. The type of order you choose depends on your business objectives. For example, you may not want to use a particular order type when you intend to buy and hold your investment. You may want to choose a different order type at any time not more market your shares.
- Market order: A market order means that your transaction will be made at the available market price without a specified price limit. If you want it to happen immediately, a market order is the way to go. However, remember that a market order does not necessarily run at the price you see. Prices may vary.
- Limit order: A limited order allows you to specify the price at which you want to buy or sell. In other words, you have more control over the price. Your purchase order will only be produced at the limit price or at a lower price. Same with a sales order. They are met at the limit price or higher.
- Stop order: A stop order is a type of market order to buy or sell a stock when the stock price moves above or below a specific price. This “specific price” is called the stop price. If it reaches the stop price, it becomes a market order and is filled at the next available market price.
- Stop-limit order: A stop-limit command combines the features of a stop and limit command. In this case, an order is executed at a specified price or better after reaching a stop price. Then the stop-limit order becomes a limit order to buy or sell at the limit price or better.
- Stop-loss order: A stop-loss order can limit losses. Instruct to sell your asset when the price drops to or below a pre-specified level.
A market order is the type of order you can consider if you plan to invest in Coca-Cola in the long run, because you may not worry too much about getting a “better price” in the short term for your investment.
Step 4: Run your trade.
Once you have chosen your order type, you can invest in The Coca-Cola Company. Navigate to your broker’s ticker window and enter “KO”. Then enter the number of shares you want to buy.
More information: What are dividend shares? In addition, examples of dividend shares
Is Coca-Cola a good dividend stock?
Yes, The Coca-Cola Company is a good dividend stock and will likely grow over the next few years. The Coca-Cola Company was able to win over interest groups and consumers and emerge stronger during the pandemic through revenue, earnings and cash generation, a good sign for future investors.