As investors turn their attention to Coca-Cola in late July, a few questions need to be answered. Due to perceptions that its business will remain relatively stable during any economic downturn, the beverage titan’s stock has outperformed the market in 2022. 

In addition to dividends and stock buybacks, investors are optimistic about the prospects for increasing cash returns.  

What to look out for

Revenue is expected to increase by 13% to $10 billion, which is the main headline number. Coke’s previous sales boost in Q1 was 16%.

As a result of currency exchange swings and pandemic-related shifts in consumer spending, that revenue figure includes currency exchange swings. In order to get a clearer picture of growth, investors should follow organic sales. Last quarter, Coca-Cola reported an 18% increase in that measure.

Even Coke’s dominant market position does not completely protect it from cost pressures. Costs for transportation, key inputs like aluminum and glass, and wages may have been higher for the company.

Profitability is a critical metric right now because consumers may be reluctant to pay higher prices if these increased costs are reflected in them.

Even as PepsiCo’s operating margin has fallen, Coke’s has risen. This factor may be the main reason the stock has outperformed the market thus far in 2022 and rival consumer staples companies.

Pepsi raised its sales outlook earlier this month, and investors expect Coca-Cola to do the same. In the report, executives expect organic sales to grow between 7% and 8%. Coke might shift similarly if demand trends continue to be strong into July, as PepsiCo raised its forecast from 8% to 10%. This dividend stock is likely to provide investors with solid cash returns. For over 60 years, Coca-Cola has increased its dividend payment. Despite slowing economic growth trends or another recession, that impressive streak won’t end anytime soon.