Coca-Cola Company (KO)

Great long term track record. Not cheap but good value. A good store of value over time.

Great franchise and a wonderful brand. Trades at about 17X earnings so a little bit rich for a beverage company. Soft drink side of the industry, all sodas, has really struggled and they have been making their money on other beverages. Prefers Pepsi-Cola (PEP-N) because of their salty snack business which has a huge franchise in Frito-Lay. So he is more comfortable with the safety of Pepsi.

Feels there is more upside in the beer space, such as Carlsberg (CARL-OMX). If you are selecting between Coca-Cola and Pepsi (PEP-N), Coca-Cola is the longer-term performer with a good track record, good dividend in good balance sheet. Pepsi is going to offer you much more upside.

One of the world’s most valuable brands. These types of companies have value when their brands are so valuable. Consumer staple, so a defensive stock. Like that it pulled back to its 200 day moving average indicating it was oversold. 2.7% dividend, which is going to grow at 7%-8% per year on average. Low beta stock.

Prefers Pepsico (PEP-N) which is a couple of multiple points cheaper. It is also more diversified. Has Frito-Lay’s. Bigger yield.

Options for this company look cheap because it is not one of the more volatile stocks so the option premiums reflect the lower volatility. The old theory on stock splits is that when you split the share price, you invite more investors to be able to participate and was positive for the stock price. However, there doesn’t seem to be a large retail presence in the market today. He would be wary of making a bet that this will go up simply on the basis of a stock split.

Just did a 2-for-1 split. Expensive stock at 19-20 times earnings. Doesn’t have the growth profile to justify the multiple.