Core Insights - Investors in 2025 are facing a challenging market characterized by persistent inflation and global uncertainty, leading to a shift towards high-quality, stable companies rather than high-risk growth stocks [1][2] Company Summaries Coca-Cola - Coca-Cola is recognized for its predictability and financial strength, boasting a dividend yield of 2.96% and an annual dividend of $2.04, with a 64-year track record of dividend increases [4][5] - The company recently announced a 5.2% increase in its dividend, marking its 63rd consecutive year of growth, supported by strong brand loyalty and pricing power [5][6] - Coca-Cola's strong organic revenue growth of 9% was attributed to successful price adjustments, demonstrating its ability to shield profits from inflation [6][7] PepsiCo - PepsiCo offers a diversified business model across beverages and convenient foods, with a dividend yield of 4.41% and an annual dividend of $5.69, maintaining a 54-year dividend increase track record [9][11] - The Frito-Lay division contributes significantly to PepsiCo's cash flow, with a recent 6% organic revenue growth, enhancing the overall stability of the company [10][11] - PepsiCo announced its 53rd consecutive dividend increase of 5%, reflecting management's confidence in its dual-engine business model [11][12] Realty Income - Realty Income focuses on providing a reliable monthly dividend, with a dividend yield of 5.63% and an annual dividend of $3.22, having made over 660 consecutive monthly payments [13][14] - The company operates as a Real Estate Investment Trust (REIT) with long-term, triple-net leases, insulating it from inflationary pressures [14][15] - Realty Income's focus on investment-grade tenants in defensive industries ensures a high occupancy rate above 98%, contributing to its financial stability [15][16] Investment Strategy - The companies highlighted demonstrate that stability and predictability are key attributes for long-term investment success, especially in uncertain market conditions [17][18]

April 29, 2025 RECONCILIATION TO U.S. GAAP FINANCIAL INFORMATION The following presentation includes certain "non-GAAP financial measures" as defined in Regulation G under the Securities Exchange Act of 1934. A schedule which reconciles our results as reported under Generally Accepted Accounting Principles and the non-GAAP financial measures included in the following presentation is attached as an appendix hereto. Q1 2025 MARGIN ANALYSIS CONSOLIDATED GROSS MARGIN Q1 2025 MARGIN ANALYSIS • Items impacting co ...

Core Viewpoint - Coca-Cola demonstrates resilience in turbulent markets, showcasing its defensive attributes and strong brand power, making it a compelling investment option for stability-focused investors [2][18][19] Market Performance - Coca-Cola's stock surged approximately 19.7% in the three months leading to late April 2025, with a year-to-date gain of about 18.8%, contrasting with the S&P 500's decline of around 10% [3][4] - The company's low beta of 0.45 indicates lower volatility compared to the market average, enhancing its appeal during market downturns [4] Dividend Information - Coca-Cola has a dividend yield of 2.83% and has increased its annual dividend for 63 consecutive years, solidifying its status as a Dividend King [6][7] - The latest quarterly dividend was raised by approximately 5.2%, resulting in an annual dividend of $2.04 per share, up from $1.94 in 2024 [7][9] - The dividend payout ratio is reported at 82.6%, but a more sustainable ratio based on comparable EPS is 70.8% [8] Financial Performance - In FY2024, Coca-Cola's organic revenues increased by 12%, driven by an 11% improvement in price/mix, indicating strong pricing power [10] - The Comparable Operating Margin expanded to 30.0% in FY2024 from 29.1% the previous year, despite increased input costs [11] - Comparable EPS increased by 7% to $2.88 in FY2024, even after a significant currency headwind [13] Cash Flow and Operational Efficiency - Reported cash flow from operations decreased by 41% to $6.8 billion in FY2024, impacted by a $6.0 billion deposit related to tax litigation [14] - Excluding this item, Free Cash Flow reached $10.8 billion, an 11% increase year over year, highlighting strong cash-generating capabilities [14] Strategic Initiatives - Coca-Cola is expanding its product portfolio in response to evolving consumer preferences, including categories like water, sports drinks, and low/no-sugar options [15] Analyst Sentiment - Analysts maintain a strong consensus Buy rating for Coca-Cola, with a 12-month price target of $75.06, suggesting a potential upside of 4.31% [16] - The company's management projects solid growth in organic revenue and comparable EPS for the fiscal year, despite anticipated currency headwinds [17]