Coca-Cola Is A Bad Investment, Here’s Why…

Coca-Cola ($KO) is a company everyone knows. It’s often touted as a fantastic, “no-brainer investment.”

You’ll often see advice like:

Buy Coca-Cola stock, and rest easy as you accumulate a steady stream of dependable dividends alongside capital appreciation. It’s a safe bet, and you cannot lose.

Coca-Cola’s market performance tells a different story.

This is a wonderful company. And it is a safe investment. But it’s not the fantastic compounder many hype it up to be.

I’ll explain…

Incredible Business At A Sh*tty Price

Over the past 10 years, Coca-Cola has delivered an average annual total return of just 6.94%. This is almost half the Vanguard S&P 500 ETF’s 12.07% returns during the same timespan.

This is worse performance than most utility stocks.

Because Coca-Cola is such a well-known stock with heavy buyer-demand, the company always trades at a premium. This gives shares little room for growth.

But what about dividends?

Some income investors aren’t concerned with capital gains, and Coca-Cola does yield almost twice as much as the Vanguard S&P 500 ETF.