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Article:
Coca-Cola - A Value Stock? by: Henry To There has been much talk lately about Coca-Cola and its potential as a value stock ' as it now spots a dividend yield of 2.6% (which is the highest dividend yield since the late 1980s) and a P/E or less than 21 ' right at the bottom of its five-year low. Moreover, the current price of approximately $43 a share is also near the bottom of its nine-year range ' (nine years ago, the last former great CEO of Coke, Roberto Goizueta, was still at the helm of the company). Sure, Coke has had its own set of problems, but it is a great company, they would argue ' and heck, Warren Buffett is also an owner of Coke shares. Don't get me wrong. I really like Coke as a company. Its brand is as American as can be, and yet over 70% of all its sales are derived from outside of North America. The country with the highest consumption per capita of Coca-Cola is Mexico. According to Interbrand.com, the brand name of Coca-Cola is worth approximately $67 billion and is the world's number one brand name. Who could forget the famous declaration of Coke's patriarch, Robert Woodruff? When the United States made the decision to enter World War II, he placed his hand on his heart and famously declared that he would 'see that every man in uniform gets a bottle of Coca-Cola for five cents wherever he is and whatever it costs.' Of course, it didn't hurt that Woodruff's friend, General Dwight Eisenhower, was a great promoter of Coke as well. By the time the war ended, hundreds of thousands of fighting men and women became a fan of Coca-Cola for the rest of their lives. Under the leadership of Goizueta, Don Keough, and Doug Ivester, Coca-Cola emerged as a growth and must-own stock during the late 1980s and up to the mid to late 1990s. Keough was the great motivational speaker, while Goizueta was unmatched in his ability to 'manage' the stock price and the Wall Street analysts who covered the non-alcoholic beverage industry and Coca-Cola. Goizueta had a habit of watching the stock price of Coca-Cola on an intraday basis on a computer in Coke's headquarters. When Warren Buffett was buying shares of Coca-Cola back in '1988
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