Sure, Coca-Cola (NYSE:KO) is a household name and a blue-chip company to say the least. But while you’ve heard of the stock and definitely the soft drink, you may not have heard of these other ways to bet on the largest beverage company in the world.
Coke, a member of InvestorPlace‘s Real America Index (representing the state of Georgia), is responsible for 1.7 billion beverage servings every day, but it doesn’t make all those sips happen alone. Instead, the company owns, licenses and markets its 500 or so brands, then works with around 275 bottling partners to get those brands to customers.
And four of those bottling partners are actually publicly traded companies — and relatively large ones at that.
The Coca-Cola Co. that we’re all familiar with is obviously the mama bear to its many bottling cubs, with a whopping $169 billion market cap. And of course, it has plenty going for it. Warren Buffett, for one, owns 400 million shares — a 9% stake worth around $15 billion. And Buffett tends to know what he’s doing.
But still, things have slowed for the company recently — even after its two-for-one stock split. In fact, KO’s gains have actually been beaten by … well … every other publicly traded Coke play out there.
Thirsty to know more? Let’s take a look at five alternative ways to gulp down the sweet soft drink.
Your first option is Coca-Cola Bottling (NASDAQ:COKE), the largest independent Coca-Cola bottler in the U.S. but the smallest company of these four bottling options.
The main Coca-Cola Co. actually does a large portion of domestic bottling itself, since it bought Coca-Cola Enterprise’s (NYSE:CCE) North American operations in 2010 — which could be part of the reason that COKE’s operations make for a market cap of only $635 million. Still, CCE has operations in 11 states, mostly in the Southeast.
To be fair, the company really hasn’t been looking all that great lately. It’s enjoyed six consecutive quarters of revenue growth, but that’s only half of KO’s streak, and COKE’s earnings per share have fallen for the last five quarters, as the drought has squeezed its margins.
The stock’s movement, though, tells a whole different story. COKE has gained nearly 18% year-to-date — doubling KO’s 9% gains — and 26% in the last year,
There’s another caveat, though. COKE has an average trading volume of just 10,000 shares, and such a low-volume stock must be handled with care. Still, it’s an option for betting on the beverage market — and just one for Coke specifically.
After Coca-Cola Co. bought Coca-Cola Enterprises’ North American operations it left the bottler as a solely European distributor and dropped it to the third-largest in the world.
Still, that bronze medal for size comes with an $8.74 billion market cap and over 170 million customers throughout Belgium, France, the U.K., Luxembourg, Monaco, the Netherlands, Norway and Sweden. And while its revenue, of course, was slashed by more than half when KO snatched back the North American operations, CCE has still fared pretty well for the most part, with 14 consecutive quarters of earnings growth before a fall in the most recent quarter.
But that slip in earnings doesn’t look to be getting back on track for rest of the year, thanks to ongoing marketplace challenges, unfavorable weather and negative currency exchange, according to the company. And remember, betting on a bottler is essentially like betting on a region, and Europe is chock-full of uncertainty.
In the end, though, investments are about the returns, and CCE has also seen gains of around 18% since January. Plus, the company plans to repurchase at least $600 million of its shares by year-end. And it has the most substantial trading volume — an average of 2 million — of all the bottlers, which should give investors some comfort.