New Purchase KO


Last week, I bought 25 shares of Coca Cola (KO) for $42.04 per share. I covered some of the reasons that I love Coke in another article (Taking a sip of Coke). At the time of this purchase, the PE ratio was over 23, the payout ratio was over 68%, and the yield was 2.9%. These statistics might seem unfavorable based on my usual entry criteria. However, this is a company that we miss having in our portfolio, and technical indicators on its stock chart are not indicating the price will get much lower in the near future. The reason these stats look this way is their EPS is lower than when I wrote the previous article ($1.93). I have no reason not to expect growth next year.

This is a case where I would rather buy a wonderful company at a mediocre price than a mediocre company at a wonderful price. Additionally, its dividend is poised to be raised next year, which should push the entry yield for this purchase over 3%.

It’s also important to keep track of where this purchase puts me in terms of my goals.

This is one more company on the path to 10 companies, putting me at 4/10 for that goal.

This is (at current yield) $30.50 per year, putting me at $226.42/$500.00 for the annual passive income goal. Almost half way there!

It also works out to $2.54 per month, which certainly isn’t much, but every little bit adds up. It puts me at an average of $18.86 per month, almost 20% of the way to my $100/month goal.

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