KO Stock: 7 Reasons to Buy Coca-Cola Stock in 2022
After losing market share to rivals over the past few years, Coca-Cola is taking back the reins. While most stocks are down this year, KO stock is up 2% as the company builds momentum.
Coca-Cola (NYSE: KO) is the largest nonalcoholic drink marker in the world. Coke has over 200 brands sold in more than 200 countries. A few of Coke’s popular brands include:
- Fanta
- Sprite
- Coca-Cola
- Powerade
- Vitamin Water
The drink maker struggled during the pandemic as places like movie theaters and restaurants shut down. But after strategically focusing on higher potential areas, Coca-Cola is driving growth again.
Coke is firing on all cylinders despite surging inflation and supply chain issues. Yet after hitting a new all-time high (ATH) of over 67$ per share, KO stock is down 12%.
Is now the time to buy KO stock while the market is down? Below are seven reasons to consider Coca-Cola stock in 2022.
7 Reasons to Consider KO Stock
No. 7 Coke Can Raise Prices
Though many businesses are struggling with inflation hitting a 40-year high, Coke has been here before. With over 125 years of experience, Coca-Cola knows a thing or two about navigating runaway inflation. For one thing, KO stock is the definition of a company with pricing power.
In other words, Coke can raise prices and still sell its products. Meanwhile, the company acknowledges inflation’s effects on consumers. So, the company is making smaller portions while working with suppliers to keep costs low.
No. 6 New Products Driving Growth
One of the primary reasons behind Coke’s recent success is the company’s focus on high-potential categories. For example, the company is moving towards everyday drink options such as coffee and low sugar.
- BODYARMOR: Coke acquired full ownership over BODYARMOR last year, an emerging sports performance drink. Though the merge is costly, it’s also one of Coke’s fastest-growing brands.
- Fairlife: After gaining significant market share last year, Fairlife surpassed $1 billion in U.S. sales. The nutrition shake leads its category, up 12% in the first quarter.
Meanwhile, KO stock is taking advantage of the growing demand for coffee. For one thing, Coke bought the second-largest coffee chain in the world last year, Costa Coffee.
The coffee brand is a favorite in the U.K. Not only that, but you can find Costa in 40 markets. Coke’s coffee category grew 27% in Q1, with Costa leading the way.
No. 5 Coke’s Dominant Market Share
Starting in downtown Atlanta, Coca-Cola products are currently found in over 200 countries and territories. The company works with sellers worldwide, accounting for about 2.1 billion servings globally between its beverages.
Not only that, but KO stock owns and markets five of the top six nonalcoholic sparkling soft drinks worldwide. The list includes Coca-Cola, Sprite, Fanta, Diet Coke and Coca-Cola Zero Sugar.
The company is mastering the art of matching consumer trends. For instance, as people move away from sugary drinks, Coca-Cola Zero Sugar is helping the brand grow by double digits. The product’s new formula is ramping growth, up 80%.
Lastly, Coke’s biggest markets outside of the U.S. include Mexico, China, Brazil and India. Some of the fastest-growing economies in the world.
No. 4 A Drink Option for Everyone
Coca-Cola is known for its legendary Trademark Coke products. But the company is expanding to meet people’s everyday needs.
The drink maker offers brands in five categories…
- Trademark Coca-Cola
- Sparkling Flavors
- Hydration, Sports, Coffee & Tea
- Nutrition, Juice, Dairy, & Plant-Based
- Emerging Beverages
Additionally, KO stock has strategic partnerships and licenses to sell other brands, such as Monster Energy (Nasdaq: MNST).
No. 3 Sales in Every Corner of the World
With partnerships and suppliers worldwide, Coca-Cola is one of the most recognized brands. With this in mind, Coke does business in the following segments.
- Europe, Middle East, and Africa
- Latin America
- North America
- Asia Pacific
- Global Ventures
- Bottling Investments
Coca-Cola sells two main products, concentrates (beverage base) and finished products. The company will make beverage bases, selling them to bottling partners to combine with still or sparkling water.
While many see Coke as a U.S. product, last year, only 17% of total unit case volume came from the United States. The company continues expanding into markets with regional brand favorites.
Keep reading and discover the top two reasons KO stock is worth watching in 2022.
Keep Reading This Article and Find Out the Top 2 Reasons Buy KO Stock
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Is KO Stock a Good Investment?
Formulated in a pharmacy in downtown Atlanta, GA, Coca-Cola serves over 2.1 billion drinks daily across all corners of the globe. After seeing sales slip the past few years, Coca-Cola looks to be back on track. During the pandemic, the drink maker aligned its focus on high potential markets. As a result, Coca-Cola is back on track for growth.
Meanwhile, KO stock is outperforming its peers. KO stock is up 2% this year, while Pepsi (NYSE: PEP) and Keurig Dr. Pepper (Nasdaq: KDP) are down over 5%. Furthermore, this is not the first time Coke has been through inflation, rising interest rates, or political tension.
The company continues investing in the business to meet consumer demands and create shareholder value. With 136 years of experience, Coca-Cola can navigate the next few months with price raises and a superior product mix. At an almost 3% dividend yield, KO stock looks to be a solid anchor for any portfolio in 2022.
