Table of Contents
- Quarterly Update, 24 October 2023
- Why consider owning stocks and shares?
- How to buy Coca-Cola shares
- How to sell Coca-Cola stock
- How to invest in Coca-Cola via a fund
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Quarterly Update, 24 October 2023
- Third quarter revenue at $12 billion, up 8% year-on-year
- Q3 net income at $3.1 billion from $2.8 billion a year earlier
- Q3 earnings per share at $0.74 versus $0.69 expected
- For full year, Coca-Cola expects comparable earnings per share growth of 7% to 8%.
Founded in 1886, the Coca-Cola Company is a ‘total beverage’ company with products sold in more than 200 countries and territories worldwide.
Its portfolio of sparkling soft drink brands includes Coca-Cola, Sprite and Fanta. Its water, sports, coffee and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa, Georgia, Gold Peak and Ayataka.
Coca-Cola’s juice, value-added dairy and plant-based beverage brands include Minute Maid, Simply, innocent, Del Valle, fairlife and AdeS.
Coca-Cola share price
The company’s operational structure includes four geographic operating segments: Europe, Middle East & Africa; Latin America; North America; and Asia Pacific. The company reporting structure also includes the non-geographic segments of Global Ventures and Bottling Investments.
Here’s what there is to know about buying and selling Coca-Cola shares.
Tax treatment depends on one’s individual circ*mstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.
Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.
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At the offset, it’s worth investors asking themselves why they want to buy stocks and shares. Are they looking for capital growth, income from potential dividends or a combination of both? An investor’s investment objectives should determine what type of shares they invest in, whether that’s high-growth technology shares, or more defensive companies with a reliable dividend stream.
Most investors look for sound fundamentals, including a track record of consistent earnings growth, a strong market position or products and services with future growth potential. These should provide a solid platform for future share price growth.
That said, other factors such as takeover rumours can drive up a company’s share price. Some investors may also be attracted by recovery plays, with a depressed share price providing the potential for a rebound.
Once an investor has decided which company to invest in, there are several steps to buying shares.
1) Open an account
Whether an investor is a seasoned trader, or new to stock market-based investments, he or she will need to open an account with a regulated brokerage to buy shares in the Coca-Cola Company.
Stockbroking is a competitive market place and services for DIY investors come in a range of guises – from online investing platforms that could be run by some of the biggest names in financial services, to investment trading apps that work off smartphones and tablets.
Before opening an account, it’s worth investors remembering to:
- focus on ultimate financial goals
- be prepared to ride out stock market ups and downs
- aim to keep trading costs to a minimum
- understand that share investing can prompt tax charges such as when selling, unless investments are held in tax-efficient wrappers such as an Individual Savings Account (ISA).
Before buying any shares, it’s also worth investors asking themselves:
- should I take professional financial advice?
- am I comfortable with the level of risk?
- what’s my budget?
- can I afford to lose money?
- do I understand the company in which I’m looking to invest?
- am I protected if my platform provider/adviser goes out of business?
2) Know where Coca-Cola is traded
The ticker symbol for Coca-Cola is KO. The company is listed and traded on the New York Stock Exchange which is open for trading from 9.30am till 4pm (ET). Investors should be able to buy Coca-Cola shares through the vast majority, if not all, brokerage accounts.
Buying shares in US dollars incurs a foreign exchange fee (typically around 1%) unless you fund the purchase from a US dollar account.
Most brokerages also charge a slightly higher transaction fee for buying US, rather than UK, shares although it’s worth comparing the fees charged by different brokers if you plan to trade US shares regularly.
You will be required to complete a W-8BEN form (valid for three years) which allows you to benefit from a reduction in withholding tax for qualifying US dividends and interest from 30% to 15%.
Holding US shares also carries exposure to foreign exchange risk. If the pound strengthens against the dollar, your shares will be worth less in sterling (and vice versa).
As with UK shares, any profit on US shares will be subject to Capital Gains Tax, unless they are held in an ISA, or self-invested personal pension.
3) Do your research
To find out more about Coca-Cola, you can visit the company’s online investor relations page.
It’s also worth comparing Coca-Cola’s valuation to other comparable companies. One way of doing this is to look at their relative price-earnings ratios (or P/Es) – shares trading on a high P/E have high expectations of potential future growth.
Another useful research tool can be brokers’ 12-month share price forecasts which can be found on financial websites.
4) Decide an investing strategy
People tend to invest in one of two ways: either with a lump sum purchase, or via smaller, steadier amounts over time.
The latter method benefits from a process known as ‘pound cost averaging’, a stock market technique which helps you pay less per share on average over time in falling stock markets. Rather than waiting to build up a lump sum, it also means an investor’s money can be put to use in the market straightaway.
Note that drip-feeding an investment may sacrifice capital growth if the share price is rising and it’s likely investors will also pay more in the way of share-trading fees.
5) Place an order
Investors who are ready to buy Coca-Cola shares, should log into their investing account or trading app. Type in the KO ticker along with the number of shares required, or the amount available to invest.
Many brokers allow investors to add a ‘stop loss’ once they have bought shares, which allows them to limit their losses should a share price fall.
6) Review Coca-Cola’s performance
Whether a share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital that investors review how each component is performing on a regular basis: monthly, quarterly, or annually.
Doing this gives them the opportunity to review performance and consider whether any adjustments to your holdings are required – to maintain the status quo, buy more stock, or sell existing shares.
How to sell Coca-Cola stock
At some point, investors may want to sell their holdings. To do this, log in to the relevant platform, type in the KO ticker and select the number of shares to be sold.
Note that where investors have made a substantial profit, there may be a CGT liability to be accounted for. The CGT tax-free allowance for the tax year 2023-24 is £6,000 and this reduces to £3,000 in 2024-25.
How to invest in Coca-Cola via a fund
Investing directly in individual stocks can be an absorbing and, hopefully, profitable experience. It may also qualify investors for shareholder perks specific to the company in question.
Investing directly in companies can, however, leave investors more vulnerable to stock market volatility and unforeseen swings in share prices.
That’s why financial experts recommend that most people invest in a diversified mix of asset classes and investment funds that hold a ready-made portfolio of dozens of different company shares. Being a large global corporation as well as being a major component of the US stock market, Coca-Cola is found in many global, US equity and index tracker funds.
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Capital at Risk. All investments carry a varying degree of risk and it’s important you understand the nature of the risks involved. The value of your investments can go down as well as up and you may get back less than you put in. Read More
Frequently Asked Questions (FAQs)
Does Coca-Cola pay a dividend?
Dividends are a distribution, usually in cash, generally paid by a company to its shareholder on a periodic basis.
Payments are usually met out of that year’s earnings. Companies aren’t obliged to pay a dividend but may choose to do so for a number of reasons: as a gesture of a company’s support to its financial backers, for example, or as an incentive to shareholders to continue owning shares.
Coca-Cola says it normally pays dividends four times a year (1 April, 1 July, 1 October, 15 December).
Can I buy Coca-Cola shares with a debit card?
Yes, in the sense that you’d need to add funds using a suitable card to an online investing service or app before making the share purchase from there.
What does it cost to trade Coca-Cola shares?
This will vary depending on the investment service/platform that an investor is using to trade.
Broadly speaking, there are three main types of fee to watch out for.
First is a share trading fee that investors are charged by a platform each time they buy or sell shares. Note that some platforms charge no fee for this activity, while others may levy a flat fee of typically between £5 and £10.
Second comes the platform fee which is typically charged as an annual fee levied for holding shares on a particular investing platform.
Again, some providers impose no fee, others charge a flat fee, and some services charge a percentage, typically 0.25% to 0.45% per annum of the value of the underlying portfolio.
And, where investors buy or sell shares denominated in a foreign currency, such as dollars in the case of Coca-Cola, nearly all of the investing platforms charge a foreign exchange fee. Again, this will vary among providers, but tends to sit in a range from 0.5% to 1.5% per transaction.
