We recently published a list of 7 Best Sugar Stocks to Buy According to Analysts. In this article, we are going to take a look at where The Coca-Cola Company (NYSE:KO) stands against other best sugar stocks to buy according to analysts.
The global food and beverage sector depends heavily on the sugar industry, which supplies a vital component for everything, from packaged meals and drinks to confectionery products. While traditional sugar production has been a reliable source of income for many years, new developments in alternative sweeteners, regulatory restrictions, and consumer tastes have changed the market and created new avenues for expansion and investment.
The demand for sugar remains high despite fluctuations in the global supply. The most recent World Agricultural Supply and Demand Estimates (WASDE) study projects that reduced cane sugar yields will cause U.S. sugar output to drop to 14.39 million short tons in the 2024–2025 season. Similarly, Mexico’s sugar output forecast has been lowered, mostly because of lower harvest quantities and a slower rate of sucrose recovery. However, rising middle-class populations in developing nations, increasing consumption of processed foods, and the ongoing demand for sugar-based goods, all contribute to the world’s rising sugar consumption.
Nevertheless, conventional sugar production is no longer the only focus of the sugar industry. A shift is occurring as health-conscious consumers actively seek healthier alternatives. About 35% of all non-alcoholic beverage releases in the last year featured no-sugar or low-sugar formulations, according to a GlobalData report, indicating that sugar reduction claims have taken center stage in the beverage industry. Major food and beverage companies have been forced to diversify as a result of this change, looking into sugar substitutes and natural sweeteners. As a result, companies are keen to meet the changing demands of a more health-conscious population, which is leading to increased investment in the sugar sector.
Therefore, companies are coming up with innovative ideas and solutions in response to these shifts, such as plant-derived sugar substitutes or artificial sweeteners. Large multinational corporations are growing their lower-sugar product lines, indicating a more significant change in the sector.
In addition to food and beverages, sugarcane and sugar beets are essential to the biofuel sector. More than half of Brazil’s sugarcane harvest is used to produce ethanol, making it the world leader in sugar-based ethanol production. This need is only likely to increase in the years to come. Sugar is a renewable energy source that is becoming increasingly important as the ethanol industry grows. Hence, sugar is an essential part of the global economy, extending beyond food and beverages, as sugar compounds are utilized extensively in industrial, medicinal, and cosmetic products.
While certain companies integrate sugar-based components into a wider range of products, others make significant profits from conventional sugar production. Thus, selecting the correct stocks is essential for investors hoping to profit from the rapidly evolving sugar sector.
Methodology
To compile our list of the 7 Best Sugar Stocks to Buy, we first identified companies operating in the sugar industry, including those involved in sugar production, sweeteners, and sugar-related ingredients. We focused on stocks with strong market capitalization and a notable presence in the sector.
Next, we analyzed institutional interest by determining the number of hedge funds which hold a stake in the company, as of Q4 2024. Hedge fund ownership data was sourced from Insider Monkey’s hedge fund database, which tracks the activity of over 1,000 hedge funds. A higher number of hedge fund holders often indicates confidence in a company’s growth potential and stability.
To assess the potential upside, we gathered analyst forecasts from credible sources. The highest projected upside for each stock was taken into account to ensure an accurate representation of growth expectations. Finally, we ranked the stocks based on their potential upside in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A row of factory workers assembling bottles of sparkling soft drinks on a conveyor belt.
The Coca-Cola Company (NYSE:KO)
Upside Potential: 5.00%
Number of Hedge Fund Holders: 81
The Coca-Cola Company (NYSE:KO) holds a strong market presence with a wide product range that includes soft drinks, juices, teas, and dairy-based beverages, making it a longstanding dominant force in the global beverage sector. With a wide distribution network and an impressive capacity to adapt to changing customer tastes, Coca-Cola has established itself as one of the best sugar stocks to buy.
With a strong 7% increase in comparable earnings per share in the year ended December 31, 2024, The Coca-Cola Company (NYSE:KO) demonstrated its resilience despite a shifting economic situation. Furthermore, a 2% rise in unit case volume and well-executed pricing initiatives supported the 14% organic revenue growth for Q4 2024. The company’s primary sector is still the sale of carbonated soft drinks, where well-known brands like Sprite and Coca-Cola continue to dominate the market. Furthermore, the company’s expansion into the value-added dairy and tea sectors has opened up new growth prospects, especially in international markets where demand is rising.
The Coca-Cola Company (NYSE:KO) is also benefiting from the power of digital transformation, which has improved its capacity for distribution and customer interaction. Nearly 600,000 new coolers were introduced by the corporation in 2024, increasing product availability and driving higher sales through retail channels. Its emphasis on premium and single-serve products has also helped to boost sales, indicating the company’s strategic focus on meeting customer demands for quality and convenience.
The Coca-Cola Company (NYSE:KO)’s strong cash flow supports its investment plans and guarantees steady returns for shareholders. As evidence of its sound financial standing and commitment to providing investors with value, the company has increased dividends for 62 consecutive years. Analysts predict that the company’s share value will rise by 5%,
indicating their confidence in its prospects.
For investors hoping to profit from the changing beverage market, The Coca-Cola Company (NYSE:KO) is an appealing option due to its extensive global reach, strong brand, and unwavering dedication to innovation.
Overall, KO ranks 7th on our list of best sugar stocks to buy according to analysts. While we acknowledge the potential of KO as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than KO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
