A portfolio of stocks I've been building since September 3 is named Volio. It will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog-per-week pace) since 2014. Five portfolios = V for Volio!
Today I'm reviewing the first of four consumer defensive sector stocks striving to join my Volio folio. This could be the eighteenth pick for Volio!
That defensive sector includes twelve industries all related to providing convenient packaged goods we've just gotta have. Industries like: beverages, brewed, soft, or distilled; confectioners; discount stores; education & training; farm products; food distribution; grocery stores; household & personal products; packaged goods; tobacco.
My subject today is a large-cap beverages (non-alcoholic) company , Coca-Cola Co. Their trading ticker symbol is KO. This is my first ever report on KO.
Coca-Cola is the largest nonalcoholic beverage entity in the world, owning and marketing some of the leading carbonated beverage brands, such as Coke, Fanta, and Sprite, as well as nonsparkling brands, such as Minute Maid, Georgia Coffee, and Glaceau. The company was founded in 1886 and is headquartered in Atlanta, Georgia.
Operationally, the firm focuses its manufacturing efforts early in the supply chain, making the concentrate (or beverage bases) for its drinks that are then processed and distributed by its network of more than 100 bottlers. Concentrate operations represented 85% of the company’s unit case volume in 2018.
Coca-Cola recently expanded its presence in the hot-beverage market through its acquisition of Costa, a leading coffee company in the United Kingdom. The firm generates most of its revenue internationally.
I use three key data points to gauge dividend paying equities or funds like Coca-Cola Company:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest, or not. Those three basic keys, however, best tell whether a company has made, is making, and will make money.
KO Price
Coke's price per share closed at $55.14 yesterday. A year ago its price was $47.35. So, in the past year its price moved up $7.79, or over 16.45%.
Assuming Coke's stock trades in the range of $45 to $60 this next year, its recent $55.14 price could rise by $2.86 to reach $58.00 by January 1, 2021, assuming upward price momentum continues.
KO Dividends
Coke's latest declared quarterly dividend was $0.40 per share paid December 16th. That $0.40 Q dividend equates to $1.60 annually and yields 2.90% based on yesterday's $55.14 closing price.
KO Gains?
Adding the $1.60 annual estimated dividend to my $2.86 optimistic estimate of Coca-Cola Company price upside shows a $4.46 potential gross gain, per share, which will be reduced by any costs to trade these shares.
As for costs, if we put a little under $1,000.00 today in Coca-Cola Company at its recent $55.14 price, would buy 18 shares of KO.
A $10 broker fee paid half at purchase and half at sale could cost us about $0.56 per share.
Subtract that $0.56 brokerage cost from the estimated $4.46 gross estimated gain per share leaves a net gain of $4.90 X 18 shares = $70.20 or a 7% net gain on a $992.52 investment.
Therefore, Coca-Cola Company (KO) shows a possible 7% net gain including a 2.9% dividend yield. It could be more, it could be less. The above speculation is based on past year performance. The actual results remain to be seen to learn if KO is worth your time and money.
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