What is Coca-Cola
Coca-Cola is a multinational beverage corporation involved in manufacturing, retailing, and marketing alcoholic and nonalcoholic beverages, concentrates, and syrups, formally founded in 1892 by the American businessman Asa Griggs Candler. Over the years, it became one of the most famous and valuable companies in the world.
It is known for its famous drink – Coca-Cola – invented in 1886 by pharmacist John Stith Pemberton. The name relates to two of the drink's primary ingredients: coca leaves and kola nuts (a caffeine source). Coca-present Cola's formula is a trade secret, however, a number of alleged formulations and experimental recreations have been published. The drink has spawned imitators and spawned a new category of soft drink: colas.
The Coca-Cola Company manufactures concentrate, which is then sold to Coca-Cola bottlers all around the world. The bottlers, who have exclusive territory contracts with the corporation, use the concentrate in combination with filtered water and sweeteners to make the completed product in cans and bottles.
The Coca-Cola Company products include Fanta, Sprite, Valpre, Nestea, Glaceau, and Burn energy drinks.
Coca-Cola is a publicly traded company, making its stock available to anyone of legal age interested in purchasing shares.
What are Coca-Cola Shares (KO)
Coca-Cola shares represent a unit of ownership in the Coca-Cola Company. – and they are among the world’s most popular financial instruments. Coca-Cola shares will rise and fall in value according to how well the company is performing at a given moment in time. Better-than-expected earnings will make Coca-Cola share prices rise, while weaker earnings will make share prices fall. However, there are many reasons why a company's share price can change.
People trade Coca-Cola shares because, just like other financial instruments, they can be an opportunity to invest money. At a basic level, you can take a position on Coca-Cola shares to get exposure to economic growth. If an economy is in good shape, you might find that companies operating in that specific economic branch or industry will grow too.
Company growth is correlated with share price increases, which is what people are hoping for when they buy Coca-Cola shares.
Since 1919, Coca-Cola has been a publicly-traded company. According to Wikipedia, one share of stock purchased in 1919 for $40, with all dividends reinvested, would have been worth $9.8 million in 2012, a 10.7% annual increase adjusted for inflation.
In 1987, Coca-Cola once again became one of the 30 stocks which makes up the Dow Jones Industrial Average, which is commonly referenced as a proxy for stock market performance; it had previously been a Dow stock from 1932 to 1935. Coca-Cola has paid a dividend since 1920 and, as of 2019, had increased it each year for 57 years straight.
Coca-Cola stock is traded on the New York Stock Exchange under the KO ticker.
If all that makes you want in on Coca-Cola’s electrifying growth, here is everything you need to know to buy Coca-Cola stock & shares to invest in KO.
How to Buy Coca-Cola Shares
Learning how to buy shares may not sound complicated, but you will need to do some research — and learn the basics — before making your first investment.
- Learn the difference between investing and trading
- Review Coca-Cola’s performance and outlook 2022
- Understand the risks and charges
- Access the trading platform and place your orders
- Stay up to date with the latest news and rumors about Coca-Cola
1. Learn the difference between investing and trading
People have two options to buy shares of stock online. Firstly, they can buy shares in companies on the exchanges where they are listed. For instance, you can buy Coca-Cola stock on the NASDAQ exchange, so you own a share in the company (investor). Alternatively, they can buy Coca-Cola shares without owning them, speculating on the price of the underlying asset (trader).
Investing and trading are similar terms that some people will sometimes use interchangeably – but there are significant differences for you to be aware of.
Investing in Coca-Cola Stock
Investors buy Coca-Cola shares hoping their price will rise and they can sell them later for a profit, adhering to the basic principle of buying low and selling high. Investors will take positions over a longer period, attempting to profit from share price changes as well as dividend payments.
While this means that they might need more initial capital to get started when compared to trading, their losses would be capped at this initial price tag. That said, investors should be aware they might get back fewer returns than they initially invested.
Investors will buy Coca-Cola shares to:
- Make a profit from the Coca-Cola share price rising
- Receive an income from dividends if the company pays them
- Benefit from the effects of compounding
This last point requires investors to hold onto their shares for an extended period. That’s why you’ll sometimes hear the phrase ”time in the markets is better than timing the markets” when talking about share investments.
>> Learn how to invest in stocks for beginners
Coca-Cola (or any single stock, for that matter) can be a very volatile investment. You can lower the risk by diversifying your investment holdings.
An index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund provides a broad market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index regardless of the state of the markets.
KO currently makes up about 0.55% of the S&P 500, meaning 0.55% of each dollar you invest in an S&P 500 index fund goes to Coca-Cola. If you want an index with an even larger KO representation, you might consider investing in a Dow Jones index fund, where Coca-Cola accounts for 1.04% of holdings.
Consumer Staples exchange-traded funds (ETFs) provide exposure to the performance of companies within the global consumer goods industry.
KO makes up 11.76% of XLY (iShares Evolved U.S. Consumer Staples ETF), 10.22% of XLP (Consumer Staples Select Sector SPDR Fund), 9.16% of FSTA (Fidelity MSCI Consumer Staples Index ETF), 8.85% of VDC (Vanguard Consumer Staples ETF), 6.59% of IYK (iShares U.S. Consumer Goods ETF).
>> Learn what ETFs are and how do they work
Trading Coca-Cola CFDs
On the other hand, traders might seek to capitalize on short-term share price gains. Rather than investing in the shares, traders speculate on the shares’ value. They can speculate on it rising by going long, as well as falling by going short.
Trading Coca-Cola stock means that you are speculating on a share’s price movements with derivatives like CFDs. In other words, you are purchasing Coca-Cola shares without taking direct ownership.
Leverage is available when you use this product, giving you full market exposure for an initial deposit – known as margin – to open your position.
For example, a trader who wanted to buy 100 Coca-Cola CFDs at $55 per share would only require $1100 of trading capital, thereby leaving the remaining $4400 available for additional trades.
But keep in mind that leverage can increase both your profits and your losses as they will be based on the full exposure of the trade, not just the margin requirement needed to open it. This means losses, as well as profits, could far exceed your margin.
With CFDs, you can ‘buy’ (go long) the shares if you think the Coca-Cola stock’s price will rise, or you can ‘sell’ (go short) if you think the Coca-Cola stock’s price will fall.
>> Learn what is CFD trading and how it works
Going Long Coca-Cola CFD
Coca-Cola has a sell price of $54 and a buy price of $55.
Coca-Cola's next earnings announcement is fast approaching, and you expect it to be good news. You think the company's share price will go up, so you buy 200 Coca-Cola CFDs at $2200. This is the equivalent of buying 200 Coca-Cola shares.
Because you can use leverage in CFD trading, you do not need to put up the full value of Coca-Cola shares. Instead, you only need to cover the margin, which is calculated by multiplying your exposure with the margin factor for the market you are trading.
So, if Coca-Cola has a margin factor of 20%, your margin would be 20% of the total exposure of your trade (200 share CFDs x $55 = $11000), which is $2200.
If your prediction is correct:
When Coca-Cola announces its results, it is clear the company had a successful quarter – and as you had predicted, its share price climbs. You decide to close your position when it reaches $60, with a buy price of $60.20 and a sell price of $60.
You reverse your trade to close a position, so you sell your 200 CFDs for $60.
To calculate your profit, you multiply the difference between the closing price and the opening price of your position by its size. $60 – $55 = $5, which you multiply by 200 CFDs to get a profit of $1000.
If your prediction is wrong:
Coca-Cola's results are worse than expected, and its share price immediately falls. You decide to cut your losses and sell your 200 CFDs at $50.
Your position has moved $5 against you, meaning you suffer a loss of $1000.
Going Short Coca-Cola CFD
Shorting with derivatives can be an effective way to protect your investments against downward price movements in your non-leveraged investment portfolio. Also, it can be a way to generate profits outright from shares that are falling in value. But when you go short, your potential losses are theoretically uncapped because there is no limit on how high a company’s share price can rise.
Here is an example:
Suppose Coca-Cola shares are currently trading with a sell price of $57, and you think the price will go down. So, you decide to open a short CFD position on 100 Coca-Cola shares CFD. A week later, the buy price reaches $45, and you close your position. This means you made $1200 in profit ([57 - 45] x 100 = $1200), excluding additional costs.
If the price rises, you register a loss. For example, if Coca-Cola shares rose to a price of $65, you would suffer an $800 loss instead, excluding additional costs.
When you create a trading account with CAPEX, you will be able to:
- ‘Buy’ (go long) or ‘sell’ (go short) Coca-Cola and other 2,000 international shares to speculate on their price rising or falling
- Take a position on our range of ETFs to get exposure to a basket of shares from an entire country, index, or sector that could be rising or falling in price.
- Trade a host of global indices – including the S&P 500, the famous technology index NASDAQ 100, the Dow Jones Industrial Average (Wall Street), and the DAX (Germany 40) – to go long or short on the performance of an entire economy with a single trade.
- Use QuantX, the smart portfolio builder that helps you cover the popular industries and only invest in the top-performing stocks.
2. Review Coca-Cola’s Performance and Outlook 2022
Before buying Coca-Cola stock—or any stock (see our guide on how to buy shares)—it’s wise to do some research into the company’s financials, performance, and outlook. The easiest place to get started is through a company’s annual reports and quarterly reports. Public companies like KO are required to publicize detailed information about their financial health in these.
You can find these on Coca-Cola’s investor relations site or by searching the Securities and Exchange Commission’s (SEC) database.
You may also turn to experts for their input. Brokerage companies frequently release commentary on major stocks and industries, and third-party evaluators like Trading Central provide comprehensive technical and fundamental analysis.
When you combine financial data with expert insight, you will be able to decide how much of your money you want to put into Coca-Cola stock.
Before you load up the trunk with Coca-Cola shares, pop opens the hood and see what you are really getting into. Remember, when you buy Coca-Cola stock, you are purchasing a small portion of an actual business:
The Coca-Cola Company, a beverage company, manufactures, markets, and sells various nonalcoholic beverages worldwide.
Coca-Cola's balance sheet, income statement, competition, and management (all explained in our guide on how to research stocks) will help you give the company a good once-over.
You can access research, analyst ratings, and other key information about Coca-Cola via your brokerage account or a financial information website. If you like what you see, your next step is to consider whether Coca-Cola fits into your current investment portfolio.
- Coca-Cola's market capitalization is $238 B
- Coca-Cola's upward move is 4.7% in 1 year
- Earnings per share (EPS) were up 15.7% per year over the last 5 years, and are forecast to grow 7.69% per year.
The company reported a strong third-quarter result with improved earnings, revenues, and profit margins.
- Revenue: US$10.0b (up 16% from 3Q 2020).
- Net income: US$2.47b (up 42% from 3Q 2020).
- Profit margin: 25% (up from 20% in 3Q 2020). The increase in margin was driven by higher revenue.
Over the last 3 years on average, earnings per share (EPS) has increased by 124% per year but the company’s share price has increased by 142% per year, which means it is tracking significantly ahead of earnings growth.
The price-to-earnings ratio (PER) is 27,0. Analysts set up a stock fair value of around $80.11, which means Coca-Cola's shares price is 31.2% undervalued according to valuation.
*Last update: November 2021. Source: Yahoo Finance
Coca-Cola's dividend has been stable for the last 10 years. Coca-Cola pays a dividend of $1.67 per share. KO's annual dividend yield is 3.01%. Coca-Cola's dividend is higher than the US Beverages - Non-Alcoholic industry average of 2.75%, and it is lower than the US market average of 4.33%. KO's past year earnings per share were $2.03, and their annual dividend per share is $1.67. Coca-Cola's dividend payout ratio is 82.3%, which is sustainable. (source: WallStreeZen)
Coca-Cola's upcoming ex-dividend date is updated on Coca-Cola’s investor relations site.
Coca-Cola Chart Price
Technical traders analyze price charts to attempt to predict price movement. The two primary variables for technical analysis are the time frames considered and the technical indicators that a trader chooses to utilize.
Our web-trading platform, for example, offers 6 chart types (including the famous Japanese candlestick chart) to help you analyze price performance across different timeframes. It also enables you to deal in an instant – directly from the charts. You will be able to open, close and edit positions in just a couple of clicks.
Trading charts always feature distinct patterns that technical analysts can use to interpret the behavior of buyers and sellers. These chart patterns can give traders an indication of where the market could go next. As you will notice when you look at a chart, the market will usually move in one overall direction or trend. There are three types of market trends: uptrends, downtrends, and sideways trends.
Technically in an uptrend channel that has been operating since April of last year, just after the fall caused by the pandemic crisis, without yet reaching the previous levels.
For a 2022 Coca-Cola forecast, we should look at the upper band of the channel as the ultimate resistance and price target. At the same time, the key support area $53 (channel support and 52-week moving average) is the lowest price that keeps the uptrend intact.
RSI indicators show no signs of exhaustion and in the short term need to break above 57 to resume bullish momentum.
Buy Coca-Cola or not?
It is recommended to watch for stocks at the major long-term support area. We want to buy Coca-Cola shares at relatively cheap prices (compared to historical values), not expensive prices. Also, have an exit plan for how you will exit a profitable trade. Define how and why you will exit. Since we used to support to get into the trade, you may consider exiting just below a long-term resistance level.
If buying at support, and planning to exit just below resistance, the upside potential should outweigh the downside risk by at least 2:1 or even 3:1. That means that if you buy Coca-Cola shares at $55, you should be reasonably able to get out of the stock at $50 or higher. In an absolute worst case you lose $50 a share (but since we don’t hold losers forever, this is highly unlikely), but based on the historical chart it is quite feasible to go up to $100/share or more. This is known as the risk/reward ratio, a key indicator when deciding to buy Coca-Cola shares or not.
With CAPEX WebTrader, you can perform an in-depth analysis of the charts with 90 indicators (including moving average, MACD, RSI, and Bollinger Bands). The platform also supports an interactive trading activity with high-end research tools helping you interpret market data.
3. Understand the risks and charges
Trading can be seen as riskier than investing due to leverage. But investing also carries a risk – and there is no guarantee that your investments would increase in value, so you could receive back less than you initially invested.
Before deciding to trade in shares, you should take steps to manage your risk. We have courses at CAPEX Academy that take you through risk management and how to mitigate your exposure to risk in the financial markets.
Our costs and charges for trading vary depending on the product that you use to take a position.
Coca-Cola (KO) CFD Trading Conditions
|SPREAD PER UNIT||0.20 pips||LEVERAGE||1:5|
|OVERNIGHT ROLLOVER - LONG||-0.0076 %||OVERNIGHT ROLLOVER - SHORT||-0.0063 %|
|INITIAL MARGIN||20.0000 %||MAINTENANCE MARGIN||10.0000 %|
- Spread represents the difference between ASK price and BID price.
- Future Rollover adjustment consists of the difference in price between expiring contract and new contract as well as the spread of the CFD.
- Swap is the amount credited to or debited from an account where positions are held overnight.
- Inactivity fee represents the monthly amount deducted if no activity is recorded for 12 months in an account.
4. Access the trading platform and place your orders
To buy Coca-Cola shares CFD with CAPEX Webtrader is very easy and intuitive. Opening an online trading account is as easy as setting up a bank account. Here are the steps:
Open an account or log in
First, create an account or log in on capex.com. To open an account click the "Register" button and complete your details.
Once the platform is accessed, the registration process must be completed in order to operate with real money. Click "Complete the Registration and Start Trading".
To log in, from the CAPEX website, click on "Login".
Deposit funds into your account
To trade with a live account it is necessary to deposit funds. This is done from the platform itself by clicking on the "Add funds" button:
Also, it is possible to trade on a risk-free demo account with a balance of € 50,000, which is ideal for getting to know the platform and testing trading strategies.
CAPEX offers you different payment methods: debit cards, credit cards, bank transfer, skrill, and more.
It is noteworthy that CAPEX does not charge any fees or commissions for depositing funds.
Look for Coca-Cola shares
To view Coca-Cola shares (KO) real-time price and chart on the trading platform can click on the "Search" icon located in the left panel or by clicking on "Shares" and then select the instrument, in this case, Coca-Cola.
Use the indicators and drawings to analyze the chart
Click the indicators icon and select your favorite ones. There are trend-following, oscillators, volatility, and support/resistance indicators available. To learn how many indicators to use and how to combine then visit the Technical Indicators section in CAPEX Academy.
Set up the order to buy Coca-Cola shares
To buy Coca-Cola shares CFD, click on the "Buy" button and a window is displayed to configure the purchase order:
The number of Coca-Cola shares to be purchased must be entered and it is allowed to set up a Stop Loss to limit the potential loss, and/or a Take Profit to close a profitable position once the Coca-Cola stock reaches a specific price. These orders can be configured based on price, pips, cash value or percentage.
To proceed with the purchase, click on "Place Order".
However, KO trading does not end here. You will want to check out the next step to make sure you are investing your money as well as you can.
Why Trade Coca-Cola with CAPEX?
- Advanced AI technology at its core: Whether they prefer the web-based and mobile-ready WebTrader or favor the highly popular MetaTrader 5, we make sure investors make effective use of fast and reliable trade execution speeds, complex order and risk management tools, advanced charting options, powerful research tools in collaboration with highly-regarded platforms such as Trading Central or TipRanks.
- Trading on margin: Providing trading on margin (up to 5:1 for individual equities), CAPEX gives you access to the stock market with the help of CFDs.
- Trading the difference: When trading Coca-Cola CFD, you do not buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of the Coca-Cola stock price. Online trading with CFDs is nothing different from traditional trading in terms of strategies. A CFD investor can go short or long, set stop loss, take profit, and apply trading scenarios aligned with their objectives.
- All-round trading analysis: The browser-based platform allows traders to shape their market analysis and forecasts with sleek technical indicators. CAPEX provides live market updates and various chart formats, available on desktop, iOS, and Android.
- Focus on safety: CAPEX puts a special emphasis on safety:
- sc.capex.com is a website operated by KW Investments Limited, which is authorized and regulated by the Seychelles Financial Services Authority, license number SD020.
- capex.com is operated by Key Way Investments Ltd and is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) (license no. 292/16).
- za.capex.com is operated by JME Financial Services (Pty) Ltd and is authorized and regulated by the South African Financial Sector Conduct Authority (FSCA) (license no.37166)
- ae.capex.com is operated by Key Way Markets Ltd and is authorized and regulated by the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (license no. 190005).
- Global partnerships: CAPEX is proud to be the Official Sponsor of Juventus, one of the most prestigious football clubs in the world, a football club that has a special place in the hearts of the people of Italy, with a strong legacy and a dedicated community.
5. Stay up to date with the latest news and rumors about Coca-Cola
Get the latest Coca-Cola (NYSE: KO) stock news and headlines to help you in your trading and investing decisions.
History of Coca-Cola
The Coca-Cola Company produces the famous Coca-Cola sugary drink, invented in 1886. At that time, the beverage was made with coca leaves and kola nuts, providing a stimulative effect. In 1889, the formula and brand were sold for $2,300 to Asa Griggs Candler.
Starting with 1919, Coca-Cola has been a publicly-traded company. It started paying a dividend in 1920, and as of 2019, Coca-Cola had increased it every year for 57 consecutive years.
Between 1932-1935 was part of the Dow Jones Industrial Average.
One of its most memorable TV commercials was in 1993 when the famous Coca-Cola polar bears debuted, and it was called "Northern Lights."
In 1948, Coca-Cola had claimed approximately 60% of the market share. By 1984, The Coca-Cola Company's power over the market decreased to 21.8% because of new competitors, namely Pepsi.
In 1988, Warren Buffet purchased more than $1 billion in Coca-Cola (KO) shares, an amount that was equivalent to 6.2% of the company. At that time, it was Berkshire Hathaway's largest acquisition. By the end of 2020, Buffett's investments in Coca-Cola had returned 1,550%, not including dividends.
The Coca-Cola Company, in recent years, has spent approximately an annual $4 billion globally to promote its drinks to the public. It also spent roughly $4.24 billion on advertising in fiscal 2019, the lion's share of which was spent on advertising Coca-Cola.
As of 2020, the Coca-Cola Company offers more than 500 brands in over 200 countries. In September 2020, the company announced that it would cut more than half of its brands due to the pandemic's effect on the business.
In February 2020, KO stock price reached an all-time high of $60.12. In the same year, it was named by Forbes the sixth world's most valuable brand.
The Coca-Cola Company is part of the Dow Jones Industrial Average (DJIA), the S&P 100, and S&P 500 indexes. It is also the world's largest producer of plastic waste.
On average, more than 10,000 soft drinks from Coca-Cola are consumed every second.
Coca-Cola common stock has split 11 times since its 1919 listing. The most recent took place on August 27, 2012, and it was a 2-for-1 stock split.
Coca-Cola stock became meme material for traders on Reddit after Cristiano Ronaldo angrily moved two bottles of Coca-Cola to the side at a Euro 2020 press conference. Coca-Cola was a sponsor of the event.
*Last Update: November 2021. Source: Wikipedia