Market volatility has been widespread this year amid rising consumer prices and consecutive interest rate hikes by the Fed. The CBOE Volatility Index has gained 40.8% year-to-date. However…
demand for beverages remains robust. Moreover, with rising health awareness, organic beverages are becoming more popular.
The beverage segment’s revenue is projected to reach $208.10 billion in 2022. Furthermore, according to Fortune Business Insights, the global functional food and beverage market size is expected to grow at a CAGR of 9.5% until 2028. The industry is gaining traction due to the steadily growing presence of startups specializing in nutrient-enriched drinks.
Given the backdrop, investors might consider adding fundamentally strong beverage stocks The Coca-Cola Company (KO) and PepsiCo, Inc. (PEP) to their portfolios.
The Coca-Cola Company (KO)
KO, a beverage company, manufactures, markets, and sells various non-alcoholic beverages worldwide. The company provides sparkling soft drinks, flavored and enhanced water, sports drinks, juice, dairy, plant-based beverages, tea and coffee, and energy drinks.
On September 29, 2022, KO and Molson Coors Beverage Company expanded their exclusive agreement to develop and commercialize Topo Chico Spirited, a line of spirit-based, ready-to-drink cocktails inspired by the taste of some of America’s most loved tequila and vodka-based beverages. This is expected to be strategically beneficial for KO.
KO has paid dividends for 59 consecutive years. Its dividend payouts have increased at a 3.6% CAGR over the past five years. Its current dividend yield is 2.9%, and its four-year average yield is 3.08%.
KO’s net operating revenue came in at $11.06 billion for the third quarter that ended September 30, 2022, up 10.2% year-over-year. Its gross profit increased 7.1% year-over-year to $6.50 billion. Also, its EPS increased 14% year-over-year to $0.65.
TOP 10 STOCKS FOR THE YEAR AHEAD
KO’s revenue is estimated to increase 10.5% year-over-year to $42.7 billion in 2022. Its EPS is estimated to grow 6.9% year-over-year to $2.48 in 2022. It has surpassed EPS estimates in all four trailing quarters. Over the past year…
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