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Essential Facts About Coca-Cola Shares Before Making a Purchase

Solid blue-chip choice continues to offer promising long-term returns.

Essential Information on Coca-Cola Shares Prior to Investment
Essential Information on Coca-Cola Shares Prior to Investment

Essential Facts About Coca-Cola Shares Before Making a Purchase

Coca-Cola Maintains Strong Performance Despite Volume Declines

In a testament to its resilience and adaptability, Coca-Cola has continued to thrive, despite facing challenges in certain quarters. The company, renowned for its 63-year streak of annual dividend increases, has earned the title of a Dividend King.

One of the key strategies that Coca-Cola has employed to offset stagnant volume is its pricing power. This tactic has helped the company maintain its financial health, even in the face of declines in sales volumes in certain regions.

In the second quarter of this year, the volume of Sparkling flavors, Sports drinks, and Juice, dairy, and plant-based categories decreased by 2%, 3%, and 4% respectively. However, the company's organic revenue increased by 5% year over year, despite a 1% decline in global unit case volume.

Coca-Cola Zero Sugar, a part of the "Trademark Coca-Cola" subcategory, has been a standout performer, with a volume growth of 14% in the second quarter. This makes it the company's fastest-growing brand.

The company's success can also be attributed to its vast distribution network and its recognition as a blue-chip stock. Coca-Cola has made attempts to diversify its portfolio, venturing into segments it previously avoided, in a bid to become a total beverage company.

Over the years, Coca-Cola's portfolio has been streamlined, with the number of brands decreasing from over 400 to around 200. This strategic move reflects the company's long-term strategy to maintain its market-leading position.

Coca-Cola has shown a willingness to adapt to consumer preferences, expanding into sugar-free options, plant-based beverages, and the alcohol ready-to-drink segment. However, the company has faced challenges in certain regions, such as Denmark, Canada, and Indonesia, due to geopolitical tensions and boycotts.

The company's focus on selling concentrates and syrups to bottling partners instead of indulging in the food business has resulted in a higher gross profit margin compared to PepsiCo. The current quarterly dividend of Coca-Cola stands at $0.51, and the average dividend yield is around 2.9%.

In conclusion, Coca-Cola's ability to adapt to changing consumer preferences, coupled with its strong financial performance, continues to make it a formidable player in the beverage industry.

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