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Coke isn't it. The soda maker's stock is one of the worst in the Dow

Coca-Cola investors could use some refreshment. Coke is one of the worst performers in the Dow so far this year, and it is one of the biggest losers in the S...

Posted: Mar 4, 2019 2:51 PM

Coca-Cola investors could use some refreshment. Coke is one of the worst performers in the Dow so far this year, and it is one of the biggest losers in the S&P 500, too.

Coke's stock has tumbled 4% in 2019 — about the same as fellow Dow components UnitedHealth and Walgreens.

That's not a huge drop. But it comes at a time when the Dow and S&P 500 are each up nearly 12%. And Coke's top rival, Pepsi, is up about 6%.

The company is trying to win more customers with new products, including the just launched Orange Vanilla Coke. It has also released several new flavors of Diet Coke in the past year, and it rebranded Coke Zero as Coca-Cola Zero Sugar.

Coca-Cola is starting to sell a lot of other beverages, too. The company recently completed a $5 billion acquisition of UK chain Costa Coffee, which competes with Starbucks.

The company has branched out over the past few years in other ways. It bought the makers of Glaceau Smartwater and Honest Tea. Coca-Cola also snagged a distribution deal with the owner of the Fairlife milk brand, and it took a nearly 20% stake in energy drink company Monster Beverage.

But Coke, despite its attempts to diversify, is still a slow growth company. Coke issued a weak forecast for 2019. Analysts expect Coke's earnings per share rise by just 5% annually, on average, for the next few years.

Coke's acquisitions could also hurt profit margins this year and add more "complexity" to the business, according to Macquarie Research analyst Caroline Levy.

The strong dollar is also expected to hurt Coke this year, CFRA Research analyst Garrett Nelson noted in a recent report.

Multinational companies like Coke typically get hit by dollar strength because it lowers the value of international revenue. American products are also less competitive overseas when the dollar is stronger.

Although Coke has made significant efforts to diversify beyond sugary sodas, the company still is reliant on beverages.

Pepsi, on the other hand, has found success with snacks. Its Frito-Lay business, which owns Doritos, Cheetos and Sun Chips, has typically posted stronger growth in sales and operating profit than the beverage unit over the past few years.

Coke doesn't seem to have much interest in food, though. CEO James Quincey has continuously referred to Coke as a "total beverage company."

Cowen analyst Vivien Azer said in a recent report that the shift away from soda and toward tea, water, coffee and juice makes sense.

But she also conceded that Coke will likely be hurt by a slowdown in the global economy, and she added that it was a surprise to see volume for carbonated beverages in the North America market fall in the fourth quarter. That could be a sign that consumers are balking at recent price increases.

Still, Coke may need to do even more in beverages to excite consumers and investors.

That could eventually mean more booze. Coke started selling Lemon-Do, a fizzy, low-alcohol content drink, in Japan last year. There aren't any plans to bring that product to the United States right now.

Coke also has ruled out launching any CBD-based beverages for the time being. CBD, the non-psychoactive component of cannabis, has started to pop up as an ingredient in some products in the United States following the passage of the farm bill.

Corona owner Constellation Brands has even invested in Canadian cannabis company Canopy Growth. Canopy hopes to sell CBD and hemp products here in the United States and is even setting up a hemp processing plant in upstate New York.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 947918

Reported Deaths: 15377
CountyCasesDeaths
Marion1291181990
Lake635721103
Allen53899761
Hamilton44082449
St. Joseph42122590
Elkhart33803491
Vanderburgh30574449
Tippecanoe26915251
Johnson23727418
Hendricks22410342
Porter21832347
Clark17562231
Madison17492385
Vigo16302285
Monroe14545191
LaPorte14389239
Delaware14183222
Howard13971273
Kosciusko11498135
Hancock10935166
Warrick10737178
Bartholomew10635170
Floyd10514208
Wayne10077226
Grant9213204
Morgan8928160
Boone8463111
Dubois7791123
Dearborn769490
Henry7691133
Noble7466101
Marshall7409128
Cass7219118
Lawrence7026153
Shelby6647111
Jackson661386
Gibson6190107
Harrison609386
Huntington604495
Montgomery5853105
DeKalb581091
Knox5535104
Miami548888
Putnam543268
Clinton537465
Whitley529354
Steuben501768
Wabash488692
Jasper483861
Jefferson474492
Ripley457777
Adams446068
Daviess4231108
Scott409165
Clay394957
White393858
Greene393392
Wells389884
Decatur388797
Fayette378578
Posey362341
Jennings356056
Washington334747
LaGrange325175
Spencer321136
Fountain318455
Randolph317190
Sullivan309449
Owen287064
Starke282864
Fulton280454
Orange277859
Jay257038
Perry254152
Carroll245229
Franklin242838
Rush237030
Vermillion235050
Parke221420
Tipton212055
Pike211740
Blackford170534
Pulaski168551
Crawford147318
Newton145845
Benton143916
Brown135846
Martin130217
Switzerland126910
Warren115616
Union98511
Ohio80511
Unassigned0482

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1385749

Reported Deaths: 21820
CountyCasesDeaths
Franklin1538881574
Cuyahoga1358332341
Hamilton987081326
Montgomery679671161
Summit568451051
Lucas51531869
Butler48000663
Stark42232983
Lorain32046539
Warren30404338
Mahoning27463643
Clermont25990297
Lake24809422
Delaware22566147
Licking20767246
Fairfield20730223
Greene20611275
Trumbull20257516
Medina20074290
Clark18170332
Richland16680236
Portage16389231
Wood15926209
Allen14333261
Miami14018261
Muskingum12927155
Wayne12185244
Columbiana11980242
Tuscarawas11204271
Marion10908150
Pickaway10606129
Scioto10531127
Erie9864171
Ross9612177
Lawrence8934125
Hancock8603143
Ashtabula8474187
Geauga8251156
Belmont8236188
Jefferson7691175
Huron7537131
Union742651
Washington7380126
Athens709365
Sandusky6963135
Darke6875137
Knox6812122
Seneca6519137
Ashland6051115
Auglaize595388
Shelby5820104
Brown575372
Mercer565190
Defiance5564101
Crawford5563117
Madison551071
Highland549282
Fulton542583
Clinton533781
Logan518687
Preble5102111
Putnam4900107
Guernsey484364
Williams468982
Perry462254
Champaign454264
Ottawa442484
Jackson434563
Pike398345
Morrow396451
Coshocton391969
Fayette383753
Adams369275
Hardin366170
Gallia355458
Holmes3321111
Henry329869
Van Wert320771
Hocking310770
Wyandot285458
Carroll266352
Paulding246443
Meigs221742
Monroe192749
Noble174142
Morgan170029
Harrison160741
Vinton141319
Unassigned05
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