Coca-Cola(US:KO) The Motley Foolยท2025-02-21 08:15Core Viewpoint - Coca-Cola demonstrates strong performance despite inflationary pressures, showcasing its pricing power, profitability, and reliable dividend, making it a solid investment choice for a diversified portfolio [2][10]. Group 1: Pricing Power - Coca-Cola, as the largest beverage company globally, possesses significant pricing power, allowing it to maintain premium pricing for its well-recognized products [3]. - The company has navigated inflation by experimenting with smaller packages and returnable glass bottles, which helps in customer acquisition while managing costs [4]. - Revenue increased by 6% year-over-year in Q4 and 3% for the full year, with organic revenue growth of 14% for the quarter and 12% for the year [5]. Group 2: Profitability - Coca-Cola has a long-standing history of profitability, leveraging its established marketing and distribution strategies to integrate new brands efficiently [7]. - Earnings per share (EPS) rose by 12% year-over-year in Q4 to $0.51, while the full-year EPS slightly declined to $2.46 [8]. - Comparable EPS also increased by 12% to $0.55 for Q4, surpassing Wall Street expectations, with free cash flow of $10.8 billion supporting its dividend payments [9]. Group 3: Dividend Reliability - Coca-Cola is recognized as a Dividend King, having paid and raised its dividend for 62 consecutive years, providing a reliable income stream for investors [10]. - The current dividend yield is approximately 2.8%, which is more than double the S&P 500 average, despite the stock's 11% increase this year [11]. - While Coca-Cola is not a growth stock, it remains a safe and reliable choice for dividend-focused investors in a diversified portfolio [12].