Companies enacting stock splits are currently all the rage on Wall Street.
A stock split allows a publicly traded company to alter its share price and outstanding share count without impacting its market cap or operating performance. Although all eyes have been on high-profile stock-split stocks like Nvidia and Broadcom, which both recently announced 10-for-1 forward splits, investors shouldn't overlook the time-tested businesses that are truly stock-split champions.
Beverage colossus Coca-Cola (KO -0.41%) is a perfect example.
Image source: Getty Images.
Unraveling Coca-Cola's stock-split history
On Sept. 5, 1919, Coca-Cola debuted as a public company on the New York Stock Exchange at an initial public offering (IPO) price of $40 per share. Over 105 years, this iconic business has navigated 10 forward-stock splits and one stock dividend:
- April 1927: 1-for-1 stock dividend
- November 1935: 4-for-1 stock split
- January 1960: 3-for-1
- January 1965: 2-for-1
- May 1968: 2-for-1
- May 1977: 2-for-1
- June 1986: 3-for-1
- May 1990: 2-for-1
- May 1992: 2-for-1
- May 1996: 2-for-1
- July 2012: 2-for-1
This means a single share purchased in 1919 would have grown to a cumulative 9,216 shares, worth $578,488.32, as of June 21, not including dividends.
Is Coca-Cola still a magnificent business?
Admittedly, Coca-Cola's stock has performed poorly in the current bull market. But when push comes to shove, Coca-Cola is flush with competitive advantages that make it a phenomenal business.
Coca-Cola has over two-dozen global brands generating at least $1 billion in annual sales, and it operates in all but three countries worldwide (North Korea, Cuba, and Russia). Kantar's "Brand Footprint" report also finds that Coca-Cola has been the most-chosen brand by consumers for an astounding 12 consecutive years.
Moreover, Coca-Cola's marketing prowess is top tier. It relies on well-known brand ambassadors and digital campaigns to connect with younger audiences, while leaning on more than a century of history to engage with its mature consumers.
For long-term-minded investors, Coca-Cola stock is still bubbling with opportunity (and a hearty dividend).
