KO
🥤 Coca-Cola has spectacular returns on capital due to its strong brand and ability to pass on inflation to prices.
💪 Its brand strength and product power translate into high returns and solid performance.
➕ The company’s large volume is a significant advantage, contributing to high returns on invested capital.
@invertirdesdecasa:
“Why do you think Coca-Cola has those spectacular returns on the capital it has? Because it’s Coca-Cola. Because if there’s inflation, it calmly passes it on to prices. Of course, I’m not saying, I’m exaggerating a bit to make the concept understood, but Coca-Cola, to the true Coca-Cola drinkers. A friend recently sent me a photo, listening to the video, watching a video in the car, which I’m going to upload to Instagram because the photo is very good, and he loves Coca-Cola, and I’m sure that if there’s a price increase, he’ll find a way to pay for Coca-Cola. Well, that’s why that advantage, that brand strength, that product strength, translates, of course, logically, into good returns on capital, into high yields from Coca-Cola with what it works with, and therefore, Coca-Cola is a good business. A company that has a very large volume, when you have a very, very large volume, that’s a great, great help to have high returns, not necessarily, but it is a help, high returns with what you work with because you have a lot of volume and it allows you to be operationally well-leveraged with what you have. That is, there are a lot, a lot of causes. In the investment course, there’s an entire class on moats and competitive advantages, and of course, on all of this that we’re talking about, but ultimately, it boils down to this: a good company is defined like this, a company that obtains high yields with what it has without needing to be excessively indebted or leveraged with debt.”
Watch the exact part of the YouTube video where Coca-Cola is discussed here:
View the video on YouTube.
Read more articles analyzing Coca-Cola (KO) at the provided link. KO stock.
