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Stock Recommendation Presentation. Coca-Cola Bryan Gruenewald. What does Coca-Cola do?.
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Stock Recommendation Presentation Coca-Cola Bryan Gruenewald
What does Coca-Cola do? • The Coca-Cola Company, a beverage company, engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. The company primarily offers sparkling beverages and still beverages. Its sparkling beverages include nonalcoholic ready-to-drink beverages with carbonation, such as carbonated energy drinks, and carbonated waters and flavored waters. The company’s still beverages comprise nonalcoholic beverages without carbonation, including noncarbonated waters, flavored and enhanced waters, noncarbonated energy drinks, juices and juice drinks, ready-to-drink teas and coffees, and sports drinks. It also provides flavoring ingredients, sweeteners, powders for purified water products, beverage ingredients, and fountain syrups. The Coca-Cola Company sells its products primarily under the Coca-Cola, Diet Coke, Coca-Cola Light, Coca-Cola Zero, Sprite, Fanta, Minute Maid, Powerade, Aquarius, Dasani, GlacéauVitaminwater, Georgia, Simply, Del Valle, Ayataka, and I Lohas brand names. The company offers its beverage products through a network of company-owned or controlled bottling and distribution operators, as well as through independently owned bottling partners, distributors, wholesalers, and retailers. The Coca-Cola Company was founded in 1886 and is headquartered in Atlanta, Georgia.
Competitive Advantage • http://www.sharenet.co.za/marketviews/article/The_Importance_of_Competitive_Advantage/1650 • The secret recipe for Coca-Cola, which arguably tastes better than other cola drinks. • Their ability to continue developing new products and re-inventing old ones – Coca-Cola currently offers over 400 brands in 200 markets worldwide. • The world’s most comprehensive distribution system has made Coca-Cola accessible to billions of people worldwide. Coca-Cola is often available in ample supply to people in areas where other consumer goods companies would never consider delivering their products. The African continent is an excellent example – it’s fairly common to see a small shop selling cold Coke in the middle of nowhere. • Coca-Cola’s production techniques are so well developed that it costs a fraction of the selling price to manufacture their product, resulting in high profit margins.
Risks(morningstar Analyst Report from Prof. pfarr) • Increases in commodity prices, particularly for raw materials such as sugar, cocoa, and oranges. • Because 60% of their revenue comes from overseas the firm is subject to currency and geopolitical risks. • Sales of Coke’s carbonated drinks could be hurt by negative publicity regarded health issues concerning drinks with high sugar content, and Coke’s sugary drink volume could be constrained should governments look to increase taxes on soda.
Where does KO Fit into our portfolio? • It is a stable stock with a low beta and consistent dividend yield. • KO has increased their dividend for the past 50 years. • Significant market share in their industry.
