Investing 101: A brief Investing Idea: Coca Cola

By Royce Leon

Alright so many people decide that they are going to start investing, but have no idea where to park there money and what is considered a reasonably safe stock. A stock that might be a risk, but it has been a farely safe stock where you will not sleep well or you wont have any money the next time you check your account. The stock idea that I will be talking about it Coca Cola. Everybody has heard of Coca Cola, its colors of red and white are all over the place. Ill be going over the overview of the company and the sector and you can determine if you like Coca Cola as an investment.

Recent History

Coca Cola has been in existance since 1886, that is considered a long time since the United States has gone through so many wars and changes leading up to 2011. Ever since 1886, Coca Cola has been in the industry of satisfying customers with their product. In 1923 Coca Cola went public in the New York Stock exchange and has been a stable performer since then.

Competitors

Coca Cola only has 2 other competitors for the soft drink market. The other 2 competitors include Dr. Pepper/Snapple and Pepsi. Compared to the other companies, Coke is the largest company valued at 143 billion dollars with Pepsi at 100 billion and Dr.Pepper/Snapple at 8 billion dollars. Domestically, Coca Cola has approximatey 40% of the domestic market share while Pepsi has 29% of the market share, and the other 30% is compromised of the other smaller companies along with Dr.Pepper/Snapple. Investing in Coca Cola means that you are investing best of breed which means that it is the "top dog" of this business.

Products

Coca Cola is not just made of just Coke, but other products as well. Coca Cola offers carbonated drinks such as Coca Cola, Diet Cola, Coke Zero, Cherry Coke, Coke Vanilla, Fanta, Sprite, Fresca and Barq's Root Beer, but there are other carbonated drinks, but these are the most common sodas that we normally see in the market. Not only do they offer carbonated drinks, but they also offer non carbonated drinks. Examples of them include: Dasani Bottled Water, Powerade, Vitamin Water, Minute Maid, Nestea, and Odwalla Natural Juice. Although I have specified the recent products, Coca Cola has over 3500 products that they are selling worldwide, so there are too many to write them all down.

Performance

The graph That I included is of the performance that Coca Cola is moving. As you can see overall that Coca Cola is performing well above what the market is performing. The blue line is Coca Cola while the red line represents the S&P 500 which is a common indicator of the U.S. market. It has slumped a little towards the end, but overall it shows that its a steady performer.

As you can see from this graph, Coca Cola has been on a recent rampage compared to Pepsi. This was a 2 year graph that was generated, and as you can see last year Coca Cola dominated Pepsi. Coca Cola still continues at an upward trend while Pepsi has stayed flat for a while.

Conclusion

As you can see Coca Cola is a consideration to invest your money in. Although I have only gone through the surface of the research you have to do to make sure that your investment is a good investment. This was only a brief introduction as why it could be a consideration, but should not be the sole reason why you should invest in the stock. Make sure you check debt ratios, dividend yield, P/E ratios, P/S ratios, and income statements, but I will further analyze this stock later on.