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In my opinion, some established companies with strong brand power, reach and a good track record remain interesting growth stocks.
Two I have my eye on are Coca-Cola HBC (LSE: CCH) and Kainos Group (LSE: KNOS) Here's why!
Coca-Cola HBC
You'd be forgiven for thinking that this is the beverage giant that many adore, including me. The company in question is, in fact, a strategic partner that is one of the largest bottling companies of the popular brand. In addition, it also produces and distributes other soft drinks.
Economic turbulence worries me. When inflation was out of control some time ago, higher costs were a concern for companies like Coca-Cola HBC. This is because margins become tighter and profits and returns take a hit. We are not out of the woods yet when it comes to inflation, so I will keep an eye on this.
However, when I consider the sheer power of the Coca-Cola brand, as well as Coca-Cola HBC's history, reach, and passive income opportunity, I find it difficult to ignore the stock.
For example, in 2023, the company reached the highest revenue figure in its history: £8.46 billion, to be exact. It is a pleasure to see this growth. I see this positive momentum continuing as well. You could probably count on one hand the number of places around the planet that don't have access to Coca-Cola or don't know its brand.
Additionally, the stock currently offers a dividend yield of 2.9%. I think it will also increase, in line with the business. However, I understand that dividends are never guaranteed.
Finally, the stock is not expensive, in my opinion. It is trading at a price-earnings ratio of just 12.
Prices
Kainos is a UK-based company that specializes in software implementation and moves away from consumer goods to focus on technology. I am particularly drawn to their Workday segment, which is a very popular software that many companies around the world are implementing.
From a growth perspective, there are many things I like about the business. Three specific aspects excite me. First, your experience implementing Workday solutions could be huge and generate real money to increase profits and profitability.
The other is the company's push to use and implement artificial intelligence (ai). The recent hype – and potential real-world applications of ai – could also boost profits and profitability.
Finally, the business is smaller than that of competitors such as Soft catThis tells me there is more room for it to grow and mature. Buying shares now could be a smart move to potentially profit from the journey ahead.
If we look at the bearish case, this same use of ai for growth today could be a problem tomorrow. What if the same ai that Kainos is deploying could replace the need for its services? There is a chance this could happen and in turn impact earnings and profitability. I would keep an eye on this.
Finally, Kainos stock would also offer me a passive income opportunity and a dividend yield of 2.5%. Like Coca-Cola HBC, I think this could also grow.