How do I invest in Coca-Cola shares from India?

Popularly known as Coke, Coca-Cola is a non-alcoholic beverage manufactured by the U.S.-based Coca-Cola Company. Not only in India, but Coke has been a widely accepted soft drink worldwide. A fun fact about Coke is that it was initially advertised as a cure to restrain alcohol consumption. But later, it received immense popularity as a soft drink, and as of today, it is sold in over 200 countries, taking the company’s annual soda sale to over 6 BILLION GALLONS. That is a lot of soda!

The company sells its products under various brand names such as Coca-Cola, Coca-Cola Zero, Diet Coke, Sprite, Fanta, Schweppes, and Minute Maid, to name a few. The Coca-Cola Company was founded in 1886 and is headquartered in Atlanta, Georgia. The stocks of Coca-Cola were listed after its IPO in 1919 at $40 per share. If you had invested $1,000 at that time, today, you would have $5,76,644.17 at the market price of $62.57 per share. However, the stock has been split 11 times, and one share of Coca-Cola purchased in 1919 would be equivalent to 9,216 shares today. Are you amazed at the returns provided by the company? Well, you can invest in Coca-Cola shares from India, but before that, you must know about the company thoroughly. 

Let’s look at a bird’s eye view about the Coca-Cola brand and determine the profitability if you want to invest in Coca-Cola shares today.

How profitable is Coca-Cola’s investment now?

Undoubtedly, the company has performed very well and has been on the trajectory of positive growth since its inception. To begin an investment in any company, a fresh outlook of the present scenario is essential. Coca-Cola had a major fall in the 2020 stock market crash and recovered fully after ever since. Since the low of 2020, the stock has gained about 63%, which is higher than its five years return of 48%.

As per the Q4 results of 2021 declared by the company, the demand for its products has jumped back above the pre-pandemic levels. However, the company did not meet investors’ expectations, and the experts have predicted that rising inflation concerns can put some pressure on the company’s profits for 2022. Its adjusted earnings per share (EPS) came to 45 cents per share.

Its net sales were up by 10% to $9.5 billion, and the net income increased by about 65% to $2.41 billion from $1.46 billion a year ago. Looking at the prospects, Coca-Cola is planning to target 5-6% growth in its EPS for 2022, and revenue growth of about 7-8% also looks achievable for the company. If the uptrend continues, then Coca-Cola shares could continue to generate good returns for its investors. 

How to Invest in Coca-Cola shares from India?

You can invest in Coca-Cola shares from India in more than one way. You can opt to buy units of mutual funds with exposure in Coca-Cola or directly buy the U.S. ETFs or the Coca-Cola stock by opening a U.S. demat account. A simple way is to invest now by opening an account with Stockal that offers an easy onboarding process and the lowest fees. With a Stockal account, you can directly buy Coca-Cola shares from India for short and long-term trading or investing purposes. Another benefit of directly investing in stocks is the real-time prices. You will never miss an entry or exit from the trade as the live prices and alerts always keep you informed.

As a trader, you can buy the stock at a low price and sell it at a higher price to gain profits; however, you must note that short-term trading is considered riskier than long-term investing. So, a safer option would be to invest in Coca-Cola shares with a long-term vision that will protect you from short-term volatility.

Are Coca-Cola shares popular in India?

Coca-Cola shares are often a popular choice amongst investors investing in global markets. However, many who are not actively investing in Coca-Cola stocks do not know that there are three listed companies in the U.S. stock market belonging to the parent Coca-Cola Company. They are – Coca-Cola (KO), Coca-Cola Bottling Co. Consolidated (COKE), and Coca-Cola Europacific Partners PLC (CCEP).

The Coca-Cola Bottling Co. Consolidated was founded in 1902. They sell post-mix products to retailers that are passed through a machine and mixed with plain or carbonated water, ultimately sold to consumers in cups and glasses. It is the subsidiary of Coca-Cola that deals with the machine dispensed Coke. Additionally, they also distribute beverages of other brands such as Monster Energy, Dr. Pepper, and Sundrop. Currently, as of March 2022, the stock of Coca-cola Bottling Co. Consolidated (COKE) is trading at $457.21 per share.

On the other hand, Coca-Cola Europacific Partners PLC, which produces and distributes Coke products in Europe, was founded in 2015. It is a relatively new company that focuses on serving over 300 million customers across the European region. The stock price of Coca-Cola Europacific Partners PLC (CCEP) is $46.02.

Coca-Cola Stock Performance and Current Market Price

To better understand the performance of all three stocks of Coca-Cola, let’s look at the 5-year charts of their prices. As you can visualize from the charts provided below, you can notice that while KO and CCEP broke their 2018 lows in the crash of 2020, the COKE stock price still traded above the lows. This indicated strength, and clearly, the COKE stock has given a return of 166.22% in the last 5 years. Its major gains were seen after the 2020 crash.

On the other hand, the stocks KO and CCEP gave a return of about 48% and 29%, respectively. Recently, the stock markets have corrected due to several reasons like rising inflation, ongoing pandemic, and geopolitical tensions between Russia and Ukraine. However, the KO stock did not see any major correction amid the volatility. It indicated strength, whereas the COKE and CCEP stocks corrected significantly.

(Source: Google Finance)

(Source: Google Finance)

(Source: Google Finance)

Recently the Morningstar rating agency has confirmed the Coca-Cola Company has a stable trend and issued an A rating to the company’s stocks. The price to earning (P/E) ratio of KO is 27.63 times, whereas for COKE and CCEP are 21.07 and 19.35 times, which is slightly above the average ratio between 20-25. Amongst the three, KO has the highest market capitalization of $271.27 billion. COKE has a market cap of $4.29 billion, whereas CCEP’s m-cap is $20.76 billion.

Few companies regularly pay dividends, and The Coca-Cola Company (KO) is one such company. Since 1920, they have paid dividends every quarter. Not only that, Coca-Cola has increased its annual dividend payout for 55 years in a row. Many investors who purchased the Coke shares decades ago are enjoying consistent significant dividends every quarter in addition to an increased number of shares due to stock splits and capital appreciation. 

To sum it up

The 130-year-old beverage brand Coca-Cola has played a significant role in growing investors’ wealth. In this journey from its listing in 1919 to 2022, the company has abundantly rewarded the investors in terms of capital appreciation and dividend income. However, considering the stable trend in the stock price, the KO share does not seem to give up its charm very soon. The market volatility may provide some correction in prices, creating a good entry point for long-term investors. The U.S. stock markets have historically rewarded long-term investors, and with fundamentally strong companies, you can join the league to earn superior returns from global investing.

To embark on this wealth creation journey by investing in geographically diversified financial markets, you need a trading account that enables investing in US stocks. You can start your investment in Coca-Cola shares from India and many other U.S.-based companies in a few simple steps. With Stockal you can do fractional investing (buying a fraction of a whole share) with an amount of as low as $1. Over 220,000 happy investors have taken their portfolios global through Stockal’s low-cost investing platform. Moreover, you can also earn 2-3% interest on your savings in the Stockal account.
To learn more, you can visit Stockal’s website here.