The Best Stock in Georgia: The Coca-Cola Co.
We analyzed publicly traded companies based in the Peach State to identify the best stock in Georgia to buy now.
A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.
Coca-Cola by the Numbers
- Headquarters: Atlanta
- Share price: $45.07
- Market value: $192.6 billion
- Price-earnings ratio: 24
(Prices and data are as of June 22, 2017)
By the end of this year, Coke expects to finish selling its corporate-owned U.S. bottling system to franchisees. This process, called “refranchising,” should ding revenues of the legendary beverage-maker in the short run. Wall Street analysts, on average, expect sales to dip 17% this year, accompanied by a 2 cent slide in earnings per share, to $1.88. But the move represents the beginning of an important shift for the company, say analysts at Credit Suisse—one that allows the company to focus on building great brands while franchisees worry about day-to-day bottling operations.
Under the leadership of CEO James Quincey, who took the reins May 1, Coca-Cola is positioning itself as a “total beverage company,” according to Credit Suisse, with plans to make and market five categories of beverages: Carbonated soft drinks, coffee and tea, energy drinks, juice and dairy drinks, and water and sports drinks (in order of market share). Coke’s strong balance sheet gives it the flexibility to create new revenue streams through strategic brand acquisitions, says Credit Suisse. Analysts there believe the company is positioned to unlock earnings growth at the fastest rate in at least five years, and they rate the stock a “buy,” with a 12-month price target of $49. Coke’s generous dividend will compensate investors while they wait for Coke’s restructuring to boost earnings growth. Coke recently hiked its dividend for the 55th consecutive year; the stock currently yields 3.3%.