May 7, 2008 - Coca-Cola Co. (KO-NYSE) is the world's #1 soft-drink company. The Coca-Cola Company owns four of the top five soft-drink brands (Coca-Cola, Diet Coke, Fanta, and Sprite). Its other brands include Barq's, Minute Maid, POWERade, and Dasani water. In North America, it sells Groupe Danone's Evian. Coca-Cola sells Crush, Dr Pepper, and Schweppes outside Australia, Europe, and North America. The firm makes or licenses more than 400 drink products in more than 200 nations. Although it does no bottling itself, Coke owns 35% of Coca-Cola Enterprises (the #1 Coke bottler in the world); 32% of Mexico's bottler Coca-Cola FEMSA; and 23% of the large European bottler Coca-Cola Hellenic Bottling.

Things may be changing for the better. Coke is evolving, away from fizzy drinks into more of what consumers are drinking, things like tea, vitamin waters, and coffee. Analysts are looking for sales to increase by 10% this year, 5% next year while earnings grow by 16.5% this year and 8% next year. It's not all from case volume, however. Some of those gains will come from a weaker dollar. Sales in 2007 grew by 19.8%.

Recently the company joined in a venture with Illy, a coffee maker in Europe, to distribute 3 ready to drink, espresso based beverages. Initially they'll be working in Europe, then spreading to other parts of the globe. Another new program: a purchase of 40% of Honest Tea, an organic drink that is gaining momentum.

On the other side of drinks, when consumers finish with a plastic bottle, it's thrown away. Coke is now recycling its plastic packaging materials in the U.S., having purchased a recycling plant in South Carolina. While good for the environment, it will also lower manufacturing costs for Coke.

Here are some of the impressive numbers Coke offers: Return on Equity was 27.5% last year, with expectations of 29% and 28% for the next 2. The dividend will be $1.52 this year, up from $1.36 last year. Total sales last year were $28.857 billion. Expect $31.7 billion this year and $33.285 billion next year. Long and short term debt is 30% of total capital. Earnings were $2.57 last year. This year analysts predict $3.00 and $3.25 for 2009.

Coke isn't going to the moon any time soon. It's not that kind of investment. Think defense here. If you're insecure about the mortgage mess and don't want to touch the financials, KO is a stock that won't be affected by delinquent borrowers. If tech is too technical for you, KO is a very understandable stock. It has a great Return on Equity. That's what every shareholder wants. And the balance sheet is super strong. There's a lot going for this stock. Just don't expect any spike upwards if you own it. It's more of a marathon holding than a sprint.

- Company Web site: www.coca-cola.com

- Ted Allrich