When Coca-Cola initially went public in 1920, it quickly found itself in the position of being a $30 million compared that was generating $9 million in annual profits. The P/E ratio was somewhere around 3. Buying a young Coca-Cola after the IPO was one of the best investments that you could have made in history, with a round lot of 100 shares growing into almost $2 billion at the end of 2012.
The profits generated by the company have doubled thirty-eight times since the IPO, plus you got a dividend that has been raised every year since 1963 alongside stock buybacks in recent years that would amplify the total wealth created by this stock even further. The company has grown stronger, with a distributing network so vast that Dr. Pepper realized it would be cheaper to just let Coca-Cola transport its drinks in certain areas rather than try to distribute its own drinks everywhere. There are now over 500 nonalcoholic brands—water, tea, milk, sports drinks, soda, you name it, and Coca-Cola has a brand for it. The profit margins are obscene—usually hovering around the 30% mark (thought the actual reported figure has been around 27.5% post-2012 because it now owns some of its bottling operations which are more capital intensive, and this is reflected in the overall numbers).