Stocks That Will Hurt Your Retirement: Coca-Cola (KO)
Along the same lines, I’d have to add the iconic The Coca-Cola Co (NYSE:KO) to the list. Now that governments have successfully beaten down tobacco use, they’ve moved their attention to the so-called obesity epidemic and its chief culprit: sugary sodas.
And adding to this is the general trend toward healthier eating. Among the more fashionable sort, drinking a Coke is just so … déclassé.
Hey, I like a cold Dr. Pepper as much as the next Texan, but we seem to be in the minority. Soda sales have been in decline for 11 consecutive years and counting.
Now, Coca-Cola sells a lot more than just Coke and Diet Coke. The company has profitable businesses in bottled water, sports drinks and fruit juices. But it’s hard to get enthusiastic about the company’s prospects when its namesake product is in decline, with no sign of respite.
At current prices, KO trades for 21 times earnings and yields 3.3%. That’s not ridiculously expensive by any stretch, but it’s not cheap enough given the company’s growth problem. So for now, I’m recommending you dump Coca-Cola from your retirement portfolio.