KO is one of those stocks that can form the cornerstone of an investment portfolio for value investors. The dividend and earnings record is so good that the only thing a value investor really has to worry about is the price that is paid to get access to the dividend stream and earnings potential of KO.
Value investors can get a feel for how much they are paying for KO’s earnings and dividend by looking at the dividend yield and the PE ratio. At the moment KO is trading at around 24 times earnings. For most companies a number around 24 would be considered a little expensive for a purchase of common stock. KO can be considered just a little bit expensive at 24 times earnings, but can be considered reasonable value for new investors. This site has recommended purchases of KO common stock at over 30 times earnings before, in 2017 and 2019 and buying at those time would have worked out well for conservative investors.
The price of the common stock of KO has increased in the last 5 years, despite the recent decline, as you can see in the chart below.
The question now for value investors is whether the current price represents good price to start a position in KO for new investors or to add to an existing position. The full answer can be found in the new analysis of The Coca Cola Company common stock, which you can find here.
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