The Coca Cola (KO) and its iconic Coke brand soft drink is one of the world’s most recognizable stocks.  Coke has been serving up the fizzy cola drink since the 19th century, and over the past six decades the beverage giant’s stock also has delivered big-time returns to shareholders.  Like most major conglomerates, KO stock took a hit from October 2008 to March 2009, but for the remainder of that year Coke stock fought its way back and became a huge winner.

So far in 2010, however, KO stock is down nearly 6%.  So, will Coca Cola shares continue to fizz out here, or is the stock now a buy? Here are five reasons why you should consider drinking up Coke stock.

• Coke earnings are strong.  On April 20, Coca Cola earnings showed a fiscal Q1 profit that was 19% higher than the same quarter one year ago.  The company said it earned $1.61 billion, or 69 cents per share, up from earnings of $1.35 billion, or 58 cents a share, a year ago.  Excluding one-time items such as restructuring charges and the impact of the Venezuela currency devaluation, earnings would have been 80 cents per share.  The adjusted EPS number did fall short of the 75 cents per share anticipated by analysts.  Coke sales in Q1 rose 5% to $7.53 billion, and though this number was slightly below expectations, sales still are very strong.
• KO stock sees rising unit case volume.  Worldwide unit case volume for Coca Cola, a measure of the number of unit cases (or unit case equivalents) of trademarked or licensed beverage products directly or indirectly sold, rose 3% in the quarter with international case volume growing at a 5% pace.  In the previous quarter, unit case volume worldwide climbed 5%, and once again we saw strong gains in the international markets.  This measure is similar to the retail same-store sales measure, and solid growth in this metric means continued upside for KO stock.
• Coca Cola has a global focus.  Coke’s strong international sales contributed mightily to Coca Cola’s overall revenue in the most recent quarters. The company knows that growth in the emerging markets is one key to its continued growth, especially considering that U.S. unit case volume sales have been lower in recent quarters.  Coca Cola is investing over $2 billion in China over the next three years to implement its plan to capitalize on what it calls China’s “organic growth” potential, and the company continues focusing on high-growth, emerging market nations. That’s good news for KO stock shareholders.
• CCE bottling acquisition.  Coca Cola recently announced it was buying the North American operations of its largest bottler, Coca Cola Enterprises (CCE).  The move is designed to streamline U.S. distribution, improve flexibility and cut costs. The company says the deal will close in the fourth quarter, and when it does it could mean the beginning of improved domestic revenue and earnings.
• Coke dividend keeps increasing.  Coca Cola dividend investors have been very pleased with KO stock and its attractive dividend yields for some time now, but in February the company raised its quarterly dividend by 7.3% to 44 cents from 41 cents a share. As the company continues growing earnings, look for that dividend to continue climbing.  At a annual dividend yield of 3.3%, KO shares are one of the better big-cap dividend payers.

If you like consumer stocks, then there is perhaps no better play than KO.  The company has proven itself a winner worldwide in both good times and bad.  And, with earnings growing and dividends being raised, now could be the time to drink up this beverage maker’s shares.

As of this writing, Jim Woods did not own a position in Coca Cola (KO)

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