Coca-Cola Co. stock outperforms market on strong trading day

jayem said:

Shares of Coca-Cola Co. (KO) inched 0.72% higher to $53.19 Tuesday, on what proved to be an all-around poor trading session for the stock market, with the S&P 500 Index falling 0.10% to 4,073.94 and Dow Jones Industrial Average falling 0.29% to 33,430.24. This was the stock's second consecutive day of gains...

Coca-Cola Co. stock outperforms market on strong trading day

The boycott hasn't seriously hurt the share price. At least so far. Coke shares are down from late last year, when it closed at just below $55. My wife and I have a fair amount of Coke stock. But I don't trade it. I have it for the dividends. Which have steadily increased over the last 50+ years. At the current price, the dividend yield is over 3%. Consider that 10 year Treasury bonds are only paying about 2.2%. 20 year T-bonds yield maybe 2.25% (Aaa Corporate bonds around 2.9%) Coke shares give a pretty darn good return given today's historically low interest rates. It makes for some nice extra retirement money. Not to mention that qualified dividends are taxed at a lower rate than bond interest or ordinary income.

Though I gotta admit that I hardly ever drink the stuff. All carbonated drinks--beer included-- make me feel bloated and uncomfortable. If I drink any kind of soda too fast, I get terrible hiccups. But financially, things do go better with Coke.

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Just goes to show that satanic billionaires can keep companies they want to afloat to keep pushing the societal garbage they do these days, the likes of which led to the boycott.

Not to mention so many people drink coke and businesses carry it, that a few individuals boycotting their company is less than a molecule in the bucket.

Me personally I am giving up the stuff because it not good for me not because of a Political statement.

Christian Bowler said:

Me personally I am giving up the stuff because it not good for me not because of a Political statement.

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That is the best reason, really.

No one takes the boycotts seriously yet. Target was hurt for awhile but it recovered. Coke's position was just that of its CEO, and though troubling, it is not changing how they do business. It is not changing their restroom policy or keeping guns off the shelf like Dick's Sporting goods.
Still, I would not dismiss such talk entirely. Some people will boycott coke. The hard part is to know what all of their brands are such as Sprite, Fresca, Fanta. I know there are many more.
I do not own coke stock, but if I did I would probably sell it. There are many other companies with good dividends that do not have CEO's that are activist. Some will do better, some will do worse. Admittedly, Coke has a great track record but I doubt it has much growth. I looked it up and both revenues and income already down year over year. Looks stagnant for the last 5 years in revenues.
I find it interesting to see your comparison of your Coke dividend to that of AAA rated bonds. I imagine you know all this but to be sure, the bonds of Coca Cola are Single A, still good, but the stock holders are even far less secure than a bondholder. I imagine the dividend is safe for years to come, but with a payout ratio of 91% of earnings, their increases will be small and could be at risk in the future. Anyway, God bless your finances. It sounds like you are real-world savvy, and it is a shame that CEO's have to gum up the system with sketchy politics.

Astroqualia said:

Just goes to show that satanic billionaires can keep companies they want to afloat to keep pushing the societal garbage they do these days, the likes of which led to the boycott.

Not to mention so many people drink coke and businesses carry it, that a few individuals boycotting their company is less than a molecule in the bucket.

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How exactly does it "go to show" all of that? Which is it - the boycott not working or satanic billionaires?

I was unaware there was any boycott. Didn't hear a thing about it here in the South Africa. Coke rules supreme here though, as almost 90% or more of carbonated beverages are theirs. Pepsi tried to enter the market about 20 years ago, but failed dismally. The company has a strong presence in other markets, so I doubt most boycott attempts will make much difference - I mean, Coca-Cola even flouted the boycott of Apartheid South Africa without issue via local subsidiaries.

I grew up with Coke, so it has a strong nostalgia element to me (though our coke is less sweet than the American one). My wife's family despises it though, from health concerns. It is too entrenched, and most people don't care enough. I certainly don't care about Georgia politics, and I feel the vast majority of Americans probably don't either.

Quid est Veritas? said:

It is too entrenched, and most people don't care enough. I certainly don't care about Georgia politics, and I feel the vast majority of Americans probably don't either.

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Yes, the situation with Coke is different from that of other companies. A boycott works best when there is a handy alternative, such as would exist if we were talking about oil companies and their gasoline stations.

And also if the company in question doesn't have a dominant position in the marketplace. But Coke owns so many other soft drinks and many people prefer the taste of Coca-Cola to, say Pepsi, that boycotting Coke is a tall order. In any case, a dispute over the location of an All-Star game most likely won't do it.

My 2 irrelevant points!

#1: Coke is headquartered in Atlanta, Georgia. It is really a part of the Georgian culture. Indeed in much of the south, the generic word for 'soft drink' is 'coke'. Pepsis are cokes. This conflict between Georgia and Coca-Cola is a real family squabble.



#2: I'm getting to the age where dividends are important. I have found REITs offer splendid yields and despite real estate markets doing whatever they do, these stocks keep churning out money. My fave is CIM, but its price has been edging up so I don't know it's as great a deal as it used to be.