By DeusXFlorida (Flickr: Coca-Cola)

On Oct. 15 beverage giant Coca-Cola (NYSE:KO) released its quarterly earnings with "revenue that came in slightly lower than expectations and earnings that were slightly ahead of what was expected." As you may expect, the case volume of the healthier non-sparkling beverages such as bottled water exceeded the growth of its traditional sparkling beverages such as brand Coca-Cola . However, doing a little research beyond the latest earnings report revealed six interesting things you may or may not know about Coca-Cola.

1. Coca-Cola distributes competitor's products.

In your local restaurant you may notice that the Coke fountain or freestyle machine may contain a dispenser or button for a Dr. Pepper Snapple Group (NYSE:KDP) product. There is a reason for that. In 2010, Coca-Cola acquired the North America arm of bottling partner Coca-Cola Enterprises (NYSE:CCE) leaving Coca-Cola Enterprises with operations solely in Europe. As part of the deal, Coca-Cola inherited a licensing deal which included distribution of Dr. Pepper Snapple Group products throughout North America via such avenues as vending and freestyle machines. This agreement with Coca-Cola started in 2010 will last 20 years .

2. Coca-Cola is less about the syrup.

Part of what used to make Coca-Cola an appealing investment lies in the fact that the largest portion of its operating revenue came from syrup distribution. Syrup or concentrates represent the high margin aspect of its business.  It simply leaned on its bottling partners to foot the bill for the infrastructure, producing the lower margin "finished product" in the bottled beverages you see on store shelves. In 2008, concentrates represented 54% of Coca-Cola's operating revenue.  The 2010 purchase of Coca-Cola Enterprises' North American assets inverted the business mixture. As of 2012, the concentrates represented 38% of Coca-Cola's operating revenue.  Coca-Cola's heavier involvement in selling its finished products partially explains the decline in operating margins over the past five years.

KO Operating Margin TTM Chart

KO Operating Margin TTM data by YCharts

3. Coca-Cola can underperform for the long-term.

Many investors probably make the assumption that a purchase in Coca-Cola shares will automatically result in market beating returns. In the chart below you can see that had you purchased shares of Coca-Cola stock at the beginning of 1998, a time period leading up to the dot com crash, you would have underperformed the market from that time forward. This also serves as proof that return is a function of price paid. Watching for a good point of entry is important with any investment.

KO Total Return Price Chart

KO Total Return Price data by YCharts

4. Warren Buffett does not serve on the board of directors.

Warren Buffett's holding company Berkshire Hathaway (NYSE:BRK-B) owns 400 million shares of Coca-Cola, 9% of the outstanding shares. However, Warren Buffett does not hold a seat on the company's board of directors, probably due to his hands off nature of owning a business; interestingly, his son Howard G. Buffett sits on the board. Howard Buffett manages Buffett Farms a commercial farming enterprise. His extensive experience in the agricultural industry can serve Coca-Cola well as they expand into emerging and developing nations where garnering fresh water and basic resources can pose a challenge. 

5. Coca-Cola's most heavily penetrated market is NOT the United States.

The United States actually ranks No. 4 with 401 servings per person in 2012 according to Coca-Cola's annual review book. The top honor actually belongs to Mexico with 745 servings per person in 2012 followed by Chile with 486 servings and Panama with 416 servings . Over the past five years, Coca-Cola's bottler in the Latin American region, Coca-Cola Femsa (NYSE:KOF) thrived due a robust Latin American  economy, bottler consolidation , and popularity of Coca-Cola's products . Coca-Cola Femsa grew revenue 61% during that time exceeding Coca Cola's revenue growth of 49% and translating into a total return that beat the mother company and the S&P 500. Investors need to tread cautiously going forward. Coca-Cola Femsa analysts recently downgraded the stock due to worries about overexpansion and the resulting debt. Moreover, the bottler recently expanded into the Philippines, an area outside its normal operations. Finally, the deceleration of the Latin American economy doesn't bode well for Coca-Cola Femsa.

KO Revenue TTM Chart

KO Revenue TTM data by YCharts

6. Coca-Cola still has room for expansion.

Last year, Coca-Cola's annual review cited several countries with below normal consumption in terms of servings per person including China and Nigeria. With only 39 and 26 servings consumed per person respectively, the company still possesses room for expansion.  The Pacific and Eurasia & Africa regions experienced the highest level unit case volume growth of 3% and 9% respectively year to date .

Foolish takeaway
A vast and complicated business lies behind the bottle of Coke you buy at the convenience store. Currently the stock trades at 19 times earnings, right on par with the market, and yields 3% annually in dividends as of this writing. With dividends the company represents a good low risk income stock for retirees or people who don't want to take on a great deal of risk. If you want robust growth you may want to look elsewhere.