Pulling Back the Layers of the Coca-Cola Empire
Some 94% of the world's population recognizes the red and white logo of Coca-Cola .You read that right, 94%. Inter-brand, the world's leading brand consultant, places the value of Coca-Cola's name at $77.8 billion, more than the brand values of Amazon.com, Disney, PepsiCo, Ford, and Starbucks combined. Some 1.8 billion Coke products are consumed daily.An investor would simply be foolish (lowercase) to not be interested in capitalizing on the monumental strength of Coca-Cola.
However, if you logged onto Fool.com and typed "Coca-Cola" into the search bar at the top right of the page, you will see four major companies beginning with "Coca-Cola" listed on American stock exchanges.
With four separate plays on the value of the Coca-Cola brand, what does each company do and which one is the least likely to fizzle out?
The classic Coke
This company is the classic Coca-Cola, the company most are referring to when they say Coca-Cola. This Coca-Cola owns, licenses, and markets more than 500 non-alcoholic beverage brands in more than 200 countries.In some way or another, Coca-Cola has a role in the sale of every single Coca-Cola branded product in the world.
The largest U.S. bottler
Coca-Cola Bottling produces, markets, and distributes products of Coca-Cola. Coca-Cola Bottling is the largest independent Coca-Cola bottler in the United States.Bottlers pay Coca-Cola for concentrate, which bottlers then use to produce beverage products. As of Dec. 30, 2012, Coca-Cola held a 34.8% interest in Coca-Cola Bottling's outstanding common stock.
A high-growth Latin American play
Coca-Cola FEMSA is the largest franchise bottler of Coca-Cola trademark beverages in the world. The company operates in Mexico, Central America, Colombia, Venezuela, Brazil, and Argentina. Coca-Cola indirectly owned Series D shares equal to 28.7% of the capital stock of Coca-Cola FEMSA.
Coca-Cola, with a European twist
Coca-Cola Enterprises is another bottler of Coca-Cola products, serving a market of 170 million consumers throughout Belgium, France, Great Britain, Luxembourg, Monaco, The Netherlands, Norway, and Sweden.In 2010, Coca-Cola acquired Coca-Cola Enterprises' North American territory.
Where Foolish investors should place their money
According to the legendary Warren Buffett, Coca-Cola is the best place to invest. Some 18% of his $89 billion portfolio is devoted to the holding of 400 million shares of Coca-Cola, a clear indication of what Buffett is thinking.
Bill & Melinda's Gates Foundation Trust also shares Buffett's view of Coca-Cola, with 7.7% of the trust being represented through 34 million shares of the company. What may surprise you is that this trust also holds roughly 6 million shares of Coca-Cola FEMSA, representing roughly 5% of the portfolio.
Which one is right for you?
If you're looking for consistent dividend growth and a prominent company which will be thriving 100 years from now, Coca-Cola is the way to go. Its 3% dividendand strong track record of being able to innovate to meet market trends will allow the company to sustain itself during a gradual decay of sparkling drink sales.
Coca-Cola FEMSA is a company for growth investors to look at. Its expected 3.4% rise in revenue from 2012 to 2013 trounces Coca-Cola's anticipated 1% drop over that same time period.The emerging markets of Latin America are expected to sustain this growth, growing EPS in the mid-teens through 2015, at the least.
Investors looking to capitalize on the revival of the European continent could take a look at Coca-Cola Enterprises, which carries a 2.1% dividendand is projected to grow EPS by double digits in 2014 and 2015.
The only real loser in the group appears to be Coca-Cola Bottling, whose combination of decaying EPS from $4.15 per share in 2009 to $2.92 in 2012and yield under 2%offers a lackluster dividend and uninspiring growth.
Foolish bottom line
The Coca-Cola empire is vast and valuable. With four separate ways to capitalize on this dynamic, any type of investor can find a company to match their style. Personally, my favorite is the original Coca-Cola business. While new and trendy flavors appear attractive, nothing can top the classic.
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The article Pulling Back the Layers of the Coca-Cola Empire originally appeared on Fool.com.
Ryan Guenette has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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