The year is nearing its end, and now is a good time to look at what happened throughout the year to the stocks you follow. If you know the important things a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it deserves a spot in your portfolio.
Today, I'll look at Coca-Cola (KO 0.91%). As a member of the Dow Jones Industrials (^DJI 0.56%), the beverage giant needs no introduction, with the No. 1 brand in the world. But with North American volume-growth slowing, Coke has increasingly relied on emerging markets for growth, and slower economies abroad have taken their toll on overall profit. Below, you'll find more on what moved shares of Coca-Cola this year.
Stats on Coca-Cola
|
Year-to-Date Stock Return |
9.1% |
|
Market Cap |
$167 billion |
|
1-Year Revenue Growth |
3.5% |
|
1-Year Net Income Growth |
(30.7%) |
|
Dividend Yield |
2.7% |
|
CAPS Rating |
***** |
Source: S&P Capital IQ.
What's behind Coca-Cola's moves this year?
Coca-Cola may be an American icon, but the real battleground in the soda wars is in emerging markets. As a result, Coke's stock mirrors what we've seen broadly in emerging-market economies, with initial strength giving way to increased uncertainty about future growth. Coke has created a strong foundation in China, but PepsiCo (PEP 0.27%) has challenged it there with some success, and other growth opportunities in countries that aren't as well-developed, such as Myanmar, give the two giants a chance to start with a clean slate.
Still, Coke can't afford to focus all its attention merely on its archrival. Dr Pepper Snapple (DPS +0.00%) is a relatively tiny niche player, but it has enough of a presence in the U.S. market to create a potentially disruptive force in the industry. Meanwhile, SodaStream's (SODA +0.00%) self-carbonating home soft-drink machines offer convenience and environmental advantages, albeit without the secret Coke formula that has stood the test of time.
Moreover, regulatory concerns have started to rear their head. With the New York City large-soda ban breaking ground on the regulatory front, Coke could see a backlash of anti-obesity sentiment strike its stock. Yet the company has tried to get in front of regulators, already voluntarily posting calorie counts on vending machines in advance of regulation slated to take effect next year.
With half a century of steady dividend increases, Coca-Cola has treated shareholders well over the long run. Despite lagging in the second part of the year, Coca-Cola is doing a reasonable job of taking advantage of the growth opportunities it still has left.
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