1 magnificent FTSE 100 stock investors should consider buying

Many years ago my parents tried to warn me that fizzy drinks could rot my teeth. They didn’t teach me that buying shares in FTSE 100 incumbent Coca-Cola Hellenic Bottling Company (LSE: CCH) could be a sweet investment.

Here’s why I believe investors should be taking a closer look at the stock.

Bottling fizz

As the name suggests, Coca-Cola HBC – as it is best known – is the bottling subsidiary of the drinks giant. Based in Europe, it bottles famous fizzy drinks including Coca-Cola, Fanta, and Sprite to name a few. It then sells these into Europe, and parts of Africa.

The shares have been somewhat subdued in the past 12 months. I reckon this is largely due to recent economic volatility.

Over this time period, they’re up only 2% from 2,335p at this time last year, to current levels of 2,398p. I reckon it’s a great entry point for me, and others to consider.

The bull case

There’s lots to like about Coca-Cola HBC, in my opinion. The obvious draw is that of the brand power the business possesses that makes it one of the biggest and best businesses of its kind globally. This sheer brand recognition and wide coverage has helped it become the poster boy for fizzy drinks, as well as provide consistent shareholder value for a number of years.

Next, with one eye on the future, Coca-Cola HBC’s potential for growth excites me. It makes 67% of its money from emerging markets, such as Africa. The potential here is untold, if you ask me. This is because wealth is rapidly rising in these territories, and products like Coca-Cola could experience a huge boost in sales and performance.

Linked to this, analysts reckon that earnings will rise by double digit percentages in the coming years, starting with the next fiscal year. I am wary that forecasts don’t always pan out so I do take this type of information with a pinch of salt.

Moving on, the shares offer a dividend yield of just under 3%, which sweetens the investment case.

Finally, the shares are reasonably priced on a price-to-earnings ratio of 13. Let me be clear, this isn’t a dirt-cheap value stock. However, I reckon it’s a very attractive entry point for an excellent company, with good fundamentals, and a bright future.

Notable risks and final thoughts

My first issue is that of continued global economic woes hurting demand and sales. Coca-Cola products are viewed as premium, and arguably come with the price tag to match. Non-branded essentials may prove more popular for budget-conscious consumers now, and for some time in the future.

The other issue is that of the fierce competition in the drinks industry. Yes, Coca-Cola has excellent brand power and a storied track record. However, the market has changed since the business started, and there are new up and comers vying for market share and fizzy dominance!

Overall, I reckon the bull case outweighs the bear case by some distance. Personally, I’d be happy to buy some Coca-Cola HBC shares when I next can.