Urban legend has it that the original color of Coca Cola was green. An interesting tale for certain, but hardly plausible when you consider that the original formula called for caramel to give the drink its dark brown color.
Were those old fashioned green bottles responsible for giving this definitively brown soda its pastoral hue?
Possibly, but I think the real birth of that myth came from fortuitous shareholders that believed that this company would be the cash cow that it has become today. They were literally seeing green when gazing into the fizzy icon.
This week, shareholders of Coca Cola (Symbol: KO) stock were seeing green once again. The company blew by estimates for the fourth quarter reporting sales of $7.3 billion versus consensus estimate of $7.0 billion.
Earnings beat estimates too with $.58 per share versus the expected $.55. Despite incredibly difficult macro economic conditions, consumers continued to consume their Coke.
Over the last year investors have flocked to the stock with the knowledge that addicted consumers would buy Coke products no matter what was happening with the economy. Of course the company is global so growth overseas will offset U.S. weakness.
Intelligence Report’s Richard C. Young estimates that 30% of corporate profits now come from abroad. He says that will benefit companies like Coca Cola for the foreseeable future.
Shares traded lower in the wake of the earnings release continuing a trend that has taken the stock down about 8% from its recent highs. A lower federal interest rate may be the reason for the decline.
That’s a mistake in my book as Coke’s attraction goes beyond its defensive stock characteristics. Sales are growing, the overseas markets are booming, and the company is buying back stock in impressive amounts.
Add in a 2% dividend that, unlike some dividend payers from the banking and mortgage space, is secure and Coke is a no-brainer in my book. Use the selling to accumulate shares and find the real thing for your portfolio.
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