A Member of Pat McKeough’s Inner Circle recently asked for his advice on The Coca-Cola Corp., the world’s largest non-alcoholic beverage corporation, a global operator in over 200 countries with an unmatched portfolio of iconic brands.
Pat likes the company’s market dominance, pricing power and operational leverage combined with 63 consecutive years of dividend increases. It’s one of the most reliable income streams in the market. However, Pat notes the firm does face challenges.
The Coca-Cola Co. (Symbol KO on New York; www.coca-colacompany.com) is a multi-national beverage company.
In 1886, Dr. John Pemberton created the syrup for the Coca-Cola soft drink. Four years later, The Coca-Cola Company came into being. Today, beverages bearing the company’s trademarks are sold in more than 200 countries and territories.
Coca-Cola owns and markets more than 200 beverage brands. The company groups them into the following categories: Trademark Coca-Cola; sparkling flavours; water, sports, coffee, and tea; juice, value-added dairy and plant-based beverages; and emerging beverages.
Coca-Cola owns and markets several of the world’s largest non-alcoholic sparkling soft drink brands. These include Coca-Cola, Sprite, Coca-Cola Zero Sugar, Fanta, and Diet Coke/Coca-Cola Light.
The company makes its beverages available to consumers through its network of independent bottling partners, distributors, wholesalers, and retailers. Plus, it has its own bottling and distribution operations.
Trademarks owned by or licensed to Coca-Cola account for 2.2 billion of the estimated 65 billion servings of all beverages consumed worldwide every day.
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The company operates through six segments: Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Global Ventures; and Bottling Investments. Beginning this year, the Global Ventures segment will become part of the Europe, Middle East, and Africa segment.
Over these segments, Coca-Cola operates in two lines of business: Concentrate operations and Finished Product operations.
The Concentrate operations sell “beverage bases” syrups to authorized bottling operations.
The Finished Product operations sell sparkling soft drinks and a variety of other finished beverages to retailers, or to distributors and wholesalers who in turn sell to retailers.
Coca-Cola is capturing “value share” in non-alcoholic ready-to-drink (NARTD) beverages. That means the company has increased its share of the total revenue produced by the NARTD category. Coca-Cola has done this by increasing volumes and prices.
Coca-Cola posts rising sales and earnings in the latest quarter
In the three months ended September 26, 2025, Coca-Cola’s revenue grew 5.1% to $12.46 billion from $11.85 billion. Earnings climbed 5.9%, to $3.54 billion, or $0.82 a share, from $3.35 billion, or $0.77
The company’s outlook is positive given its significant scale, geographic reach, strong brand portfolio, and established relationships with bottling partners.
Coca-Cola will continue to focus on new product innovation including developing lower-price options to help offset weaker consumer confidence and spending. The company is also developing healthier products with less sugar to meet consumer lifestyle changes.
Meanwhile, the company faces some challenges. For instance, tariffs present a challenge, although the company can mitigate higher prices for aluminum cans with its hedging programs. It’s also able to shift to more plastic bottles.
Meanwhile, Coca-Cola raised its quarterly dividend by 5.2% with the April 2025 payment, to $0.51 a share from $0.485. The stock yields 3.0%.
Recommendation in Pat’s Inner Circle: The Coca-Cola Co. is a hold.
