Coca Cola (NYSE:KO) stock has dropped 1.7% month-over-month as of close on June 25. However, it shares are still up 2.9% so far this year. Today, I want to discuss whether investors should look to buy the beverage giant on the dip.
Earlier this month, media coverage erupted after Portuguese soccer player Cristiano Ronaldo slid the sponsored drink aside in favour of water in a post-game press conference. News outlets around the world claimed that this move cost Coca-Cola stock billions. In truth, the stock had already dipped to start the trading day. Ronaldo’s drink shuffle had little to do with the shaky stock price. Of course, why should the truth get in the way of a good story?
Coca-Cola released its first quarter 2021 results on May 11. Net sales rose 8.2% from the previous year as physical case volume shot up 4.8%. Meanwhile, gross profit increased 10% to $43.4 million. Moreover, income from operations climbed 187% to $94.2 million. The company said that it expects some uncertainty to continue in 2021 as we come out of the pandemic.
However, its brands look strong as it kicks off this fiscal year.
Shares of Coca-Cola last had a price-to-earnings ratio of 32. This puts the stock in favourable value territory relative to industry peers. It also boasts a 3.1% dividend yield. Coca-Cola is a behemoth that is well-positioned to have a bounce back year as the global economy reopens.
