Whats with all the hype on KO? If you bought in during July 1998 at $87.19 per share, you have held 14 long years and are still at a loss. A few skimpy dividends along the way may have gotten you even, but I just don't see the point of such a crappy stock. And to consider buying now at a 52 week high with a P/E of 19 seems to guarantee a flat performer going forward. I was buying the split story, but upon further research, have second thoughts.
KO is not the same company it was in 1998. They have found growth in China and India. That makes it a different company with top end growh not expected in 1998.
However, like any stock cost basis matters. I'm in at 41.00 when the talk was sales where shrinking due to people moving to "Healthy" drinks. So I have almost Doubled my Money. I've re-invested Dividends and have 10% more shares because of that.
My Div Yield on Cost is 5.5%. Buffett says KO divs will DOUBLE this decade. That means I'll be earning 10% on my cost.
Now THATS something to get excited about.
Yeah, that seems the only way. Buy & hold clearly don't work here. This surely seems like a high as the P/E is over 20. The S&P historical average P/E is around 12. Assuming KO's price does not decline, it could take another 8-10 years of earnings to get the P/E to contract to a more reasonable level. Sadly, anyone who bought KO in 1998 may have to wait another 10 years to break even. That would be 24 years of nothing just to collect a skimpy dividend.