The Coca-Cola Company (NYSE:KO) isn’t a stock that you’re going to buy with the expectation that it’s going to soar in value anytime soon. In fact, you’ll probably like it for the opposite, it’s stability and predictability.
The stock averages a beta of just 0.34, which means that it won’t see a lot of volatility even if the markets do.
Over five years, its share price has risen by 30%. That’s a good return, but that also averages out to about 5% per year. It’s nothing to get excited about, and it may be a big challenge to improve that number going forward.
Besides taking on new acquisitions, the opportunities for growth are going to be limited for Coca-Cola.
However, even if it doesn’t continue to grow organically, Coca-Cola is still an attractive blue-chip stock to hold for many years, decades even. With lots of cash flow being generated from its operations, the company has a lot of flexibility in what it decides to do.
The company has been busy with investments and acquisitions, and that’s one way where Coca-Cola can help add value for investors. The other way is through its dividend, which currently pays shareholders around 3% per year.
Ultimately, the strongest asset that Coca-Cola has is its brand, which continues to have a lot of value all over the world. And its beverages also remain popular and that’s not likely to change anytime soon.
The stability, financial strength and dividend income that the stock offers investors makes Coca-Cola an ideal long-term buy.
