How To Buy Shares in Coca Cola (KO)

Introduction

Coca Cola is one of the leading companies producing carbonated soft drinks. They leverage a unique franchise distribution system that provides them with rapid expansion.

Coca Cola stock has a market capitalization of 253.35 billion USD. It’s a defensive stock so, there are always dividends and stable earnings regardless of the stock market’s state. You can take advantage of that dividend, even if you’re new to buying stocks. 

Highlights and Key Takeaways

• Coca Cola (KO) has 258.66 billion USD.

• Coca Cola is a leader in the non-alcoholic beverages industry with a significant possibility of increased growth.

• Coca Cola pays dividends four times a year – April 1, July 1, October 1, and December 15.

• You can invest in KO through index funds or exchange traded funds (ETFs) that own KO shares.

Understanding Coca Cola as an Investment

Why Invest in Coca Cola?

Coca Cola is a leader in the non-alcoholic beverages industry, with a significant opportunity for growth in high value product categories like sparkling, energy, ready-to-drink tea, and juice. The company continuously focuses on brand building, resource allocation, and innovation. This innovation includes intelligent experimentation that cuts through product, packaging, and processing.

Risk Associated With Investing in Coca Cola

As a company, Coca Cola has a good grip on its market and customers. However, every stock has its risks. Here’s what to look out for when investing in Coca Cola:

• Market volatility: The stock market can be volatile, making investors experience unpredictable price movements. Downward volatility can seem like a buying point for some investors for future gains, but there’s also potential for loss.

• Policy change: Government decisions on taxation, regulation, and fiscal policies shape the environment in which private sectors operate. Any uncertainty about government policies could negatively affect the stock market.

• Dividend risk: This is the risk of Coca Cola cutting or reducing its dividend, which may lead to a drop in stock value. To reduce the effects of dividend risk, consider diversifying your portfolio with multiple dividend paying stocks.

How To Buy Coca Cola Stock

Choosing a Brokerage

To benefit from KO’s dividend income or high return on investment, you need to choose the right brokerage.  A brokerage account will enable you to buy and sell different types of investments. When choosing a brokerage, you need to consider the following factors:

• Unique brokerage needs: Learn everything about your ideal brokerage, including basic or advanced educational resources with easy access to the support team, and ensure if this broker can help you with your investing goals.

• Account fees: Review the brokerage’s website to know if they charge any fee or commission. On average, the typical fee charged by most firms falls between 1% to 2% of the transaction’s value.

• Broker credentials: Ensure the broker you choose has a good reputation and maintains a significant level of transparency. Also, look out for licenses or a proof of registration under institutions like the Financial Industry Regulatory Authority (FINRA).

• Ease of funds deposit and withdrawal: Assess the available deposit and withdrawal methods and their processing times. Only choose a broker that doesn’t have a complicated number of steps for depositing and withdrawing funds.

“Warren Buffet’s Berkshire Hathaway $BRK.B received $704 million dividends from Coca-Cola $KO last year — Dividend Hero

Placing a Stock Order

To place a stock order on Coca Cola, follow the following steps:

• Step 1: Open a brokerage account for KO shares.

• Step 2: Decide the number of shares you want to buy.

• Step 3: Select an order type. You can choose between a market order and a limit order. Market orders let brokers buy stocks at the best available price and are typically great for buy-and-hold investors. Limit orders on the other hand, indicate the maximum price for which a Coca Cola stock can be bough by the broker.

• Step 4: Place stock order by visiting the appropriate section and tapping the “place order” button.

Monitoring Your Investment

Understanding Stock Performance

Once you have an idea on how to buy shares in Coca Cola, you should watch how well they perform. To monitor the performance of Coca Cola’s stock, understand how to read a stock chart and financial report. 

A stock chart simply shows the price change of a stock with time. Usually, the price change falls on the vertical axis, while the period or time change falls on the horizontal axis. With the stock chart, you can assess historical highs and lows of KO’s stock. 

Another important part of monitoring your stock performance is using important financial indicators. Understand the following indicators and monitor them closely:

• Price to earnings ratio (P/E): This ratio lets you know when a stock price is high or low in comparison to its earnings. It shows the market’s expectations. A low ratio means the stock’s price is low relative to earnings, while a high ratio means the stock’s price is high relative to earnings.

• Earnings per share (EPS): EPS is the value of the company’s total profit (in this case, Coca Cola) divided by the number of shares. Companies with a steady EPS over time may outperform those with volatile earnings.

• Dividend payout ratio (DPR): This ratio shows how much a company pays investors in dividends compared to how much they earn. A high DPR typically attracts investors who want a steady stream of income.

When To Sell Your Stock

You may be optimistic about a stock regardless of its market state, but stock performance indicators should not be ignored. The stock shall be sold if one or more of these parameters come into play:

• Company’s primary objectives have changed.

• Company’s valuation doesn’t reflect business reality.

• You made an impulsive decision without proper assessment of the stock market or the company.

• You need an emergency fund.

How To Invest in Coca Cola With Funds

Besides just buying Coca Cola’s shares, you may also invest in the company through index funds or exchange-traded funds (ETFs) that own KO shares. This method of investment involves opening a brokerage account or an account with a mutual fund company that offers KO’s index fund. Some investors consider index funds because they are seemingly more tax efficient and cost less in terms of fees.

Conclusion

Coca Cola has a multi-billion dollar market capitalization, which means they are more stable in comparison to smaller cap companies. The company is consistent with intelligent product innovation and experiments to improve consumer experience. To buy their shares, carefully select a broker, look out for a regulated brokerage firm and constantly monitor KO’s stock performance.

FAQ

How Can I Purchase Coca Cola Stock?

You can purchase Coca Cola through a brokerage account. Ensure you pick a licensed and regulated broker charging minimal fees, along with providing a seamless investing experience. For instance, a good broker should allow easy funds deposit and withdrawal. 

Does Coca Cola Pay Dividends?

Yes, Coca Cola pays dividends at least four times a year. It has been seen that dividends are typically paid out April 1, July 1, October 1, and December 15. You can monitor expected dividends by reviewing your dividend payout ratio (DPR).

Are Coca Cola Shares a Good Buy?

Coca Cola shares are a good buy especially due to the company’s constant innovation. The stock also has a significant market capitalization that ensures its stability in the market.

What is the Best Stock to Buy Right Now?

The best stock to buy right now is KO. You can also consider investing in top companies like Amazon (AMZN), Microsoft (MSFT), Nvidia (NVDA), and Snowflake (SNOW).