The Coca-Cola Co (NYSE:KO) has been around since its humble beginning at an Atlanta, Georgia soda counter in 1886. Since then, it has built one of the iconic brands in the world. According to the company website, today people around the world enjoy Coke products 1.9 billion times every day.
There's no doubt that this soft drink company is a powerhouse and dwarfs all competitors by market cap, save PepsiCo, Inc. (NYSE:PEP) and Nestle SA (ADR) (OTCMKTS:NSRGY).
But nowadays, many analysts are concerned that KO's size may be a disadvantage rather than an advantage. The soft-drink market is undergoing significant transformation from the model that served it so well for the past three or four decades.
New consumers are no longer focused on the sweet drinks of the past, like KO's flagship Coke product. Now, consumers are interested in flavored waters, energy drinks and juices that have less "man-made" flavors and ingredients.
This is a long-term transition, but it is one that is crucial to get right for the big soft drink companies. At this point, analysts feel that KO is moving in the right direction, but isn't moving fast enough for their taste.
KO Stock: A Dividend You Can Lean On
That gives us a great opportunity to buy into KO stock on the cheap. We can get one of the world's Dividend Aristocrats at a discount. KO has never missed a dividend payment since 1920 and has raised its dividend every year for the past 54 years. Right now, that dividend yield is a very attractive 3.4%, much higher than it's competitors.
And as for its ability to transition to new market demands, well that has been in the company's DNA for decades. For example, KO has been the No. 1 soft drink company in Japan for more than 50 years. But Coke isn't the reason.
Japan is a nation known for its unique tastes in both food and drink. But it's also known for its passion for food and drink. KO learned what the market wanted and provided it - Ayataka iced green tea. This is why KO dominates in Japan.
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