1 stock every investor should buy at least once

The Fed's fight against inflation sparked widespread recession concerns and prompted a sell-off in stock markets. However, beverage giant Coca-Cola (KO) has demonstrated its resilience and is well positioned to maintain a stable performance thanks to the inelastic demand for its products. Given the company's defensive business model and reliable dividend payments, every investor should buy the stock at least once. Read on….

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The Fed's aggressive response with giant rate hikes to persistent inflation has raised concerns of an economic slowdown. Former Boston Federal Reserve Chairman Eric Rosengren said interest rates may need to rise to 5.5%, meaning a recession is "very likely" in 2023.

In this uncertain environment, consumer staples businesses, such as food and beverage, are holding out due to the constant demand they face.

Beverage industry giant The Coca-Cola Company (KO) demonstrated its resilience by defying macroeconomic headwinds and reported better-than-expected third-quarter results. The company's revenue of $11.1 billion beat analysts' estimate by 5.7%. Its EPS of $0.69 exceeded the consensus estimate of 8.3%.

The company expects this momentum to continue and has raised its growth forecast. For fiscal 2022, KO expects to achieve organic (non-GAAP) revenue growth of 14% to 15%. It also expects to generate comparable (non-GAAP) EPS growth of 6% to 7%.

In addition, the stock offers a steady stream of income through attractive dividends. KO's annual dividend of $1.76 yields 2.95% on the current stock price. The company's dividend payouts have grown at CAGRs of 3.1% and 3.6% over the past three and five years, respectively. KO has a record 59 consecutive years of dividend growth.

The stock has been down slightly since the start of the year, but has gained 4% over the past year. It has also gained 7.8% over the past month to close its last trading session at $58.77.

The following are factors that may influence knockout performance in the short term:

Strong recent finances

For the third fiscal quarter ended September 30, KO's non-GAAP net operating income increased 10% year-over-year to $11.05 billion. Its non-GAAP gross profit rose 6.5% from the year-ago quarter to $6.54 billion. Non-GAAP net income and non-GAAP net income per share increased 6.7% and 6.2% from the prior year period to $3.01 billion and $0, respectively. $.69.

Robust profitability

KO's LTM EBIT margin, net profit margin and FCF margin of 28.90%, 23.44% and 22.49% are higher at 240.7%, 397.6% and 637.5% to the respective industry averages of 8.48%, 4.71% and 3.05%.

Its ROCE, ROTC and ROTA over the last 12 months of 44.13%, 11.63% and 10.73% are 282.2%, 88.3% and 132.8% higher than their sector averages 11.55%, 6.18% and 4.61 respectively. %.

POWR ratings reflect promising outlook

KO's strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which equates to a buy in our proprietary rating system. POWR ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary scoring system also rates each stock against eight distinct categories. KO has a stability rating of B, in sync with its beta of 0.58.

The stock has a B rating for Sentiment, in line with favorable analyst estimates. Analysts expect its current-year revenue and EPS to grow 10.4% and 7% year-over-year to $42.67 billion and $42.67 billion, respectively. $2.48.

KO also has a quality rating of B, justified by its profitability above that of the industry.

In the beverage industry at 34 stocks, it is ranked No. 21. The industry is rated A.

Click here to see additional POWR ratings for KO (Growth, Value, and Momentum).

Check here all the most important stocks in the beverage sector.

Conclusion

Recent KO earnings and increased full-year guidance look promising. Additionally, the company has an excellent track record of paying stable dividends. Given the stability of consumer staples in this...