A few years in the past my dad and mom tried to warn me that fizzy drinks might rot my tooth. They didn’t train me that purchasing shares in FTSE 100 incumbent Coca-Cola Hellenic Bottling Firm (LSE: CCH) could possibly be a candy funding.

Right here’s why I imagine buyers needs to be taking a better take a look at the inventory.

Bottling fizz

Because the title suggests, Coca-Cola HBC – as it’s best identified – is the bottling subsidiary of the drinks large. Primarily based in Europe, it bottles well-known fizzy drinks together with Coca-Cola, Fanta, and Sprite to call a couple of. It then sells these into Europe, and elements of Africa.

The shares have been considerably subdued prior to now 12 months. I reckon that is largely resulting from current financial volatility.

Over this time interval, they’re up solely 2% from 2,335p right now final yr, to present ranges of two,398p. I reckon it’s a terrific entry level for me, and others to contemplate.

The bull case

There’s heaps to love about Coca-Cola HBC, in my view. The apparent draw is that of the model energy the enterprise possesses that makes it one of many largest and greatest companies of its form globally. This sheer model recognition and huge protection has helped it grow to be the poster boy for fizzy drinks, in addition to present constant shareholder worth for quite a lot of years.

Subsequent, with one eye on the longer term, Coca-Cola HBC’s potential for development excites me. It makes 67% of its cash from rising markets, similar to Africa. The potential right here is untold, in the event you ask me. It is because wealth is quickly rising in these territories, and merchandise like Coca-Cola might expertise an enormous increase in gross sales and efficiency.

Linked to this, analysts reckon that earnings will rise by double digit percentages within the coming years, beginning with the following fiscal yr. I’m cautious that forecasts don’t at all times pan out so I do take any such data with a pinch of salt.

Shifting on, the shares provide a dividend yield of just below 3%, which sweetens the funding case.

Lastly, the shares are fairly priced on a price-to-earnings ratio of 13. Let me be clear, this isn’t a dirt-cheap worth inventory. Nonetheless, I reckon it’s a really engaging entry level for a wonderful firm, with good fundamentals, and a vibrant future.

Notable dangers and last ideas

My first subject is that of continued world financial woes hurting demand and gross sales. Coca-Cola merchandise are seen as premium, and arguably include the value tag to match. Non-branded necessities might show extra fashionable for budget-conscious shoppers now, and for a while sooner or later.

The opposite subject is that of the fierce competitors within the drinks trade. Sure, Coca-Cola has glorious model energy and a storied monitor file. Nonetheless, the market has modified because the enterprise began, and there are new up and comers vying for market share and fizzy dominance!

General, I reckon the bull case outweighs the bear case by a long way. Personally, I’d be pleased to purchase some Coca-Cola HBC shares once I subsequent can.