3 great reasons to buy Coca-Cola Amatil Ltd today

Coca-Cola Amatil Ltd (ASX: CCL) has been one of the ASX’s worst performing blue-chip stocks in recent years. In fact, thanks to a 38% plunge since May 2013, the stock has risen just 4c or 0.4% in the last five years.

Needless to say, that’s an extremely dismal performance – especially when the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has risen 35.5% in that time.

Coca-Cola Amatil July

Source: Morningstar.

While investors have every right to be nervous about what lies ahead for the company, I believe it presents as a very solid buy right now. Here are three reasons why…

1)  Although the stock’s recent performance might not reflect it, Coca-Cola Amatil is amongst Australia’s strongest companies. The issues affecting the business appear to be short-term in nature and the long-term should hold far greener pastures.

2)  The best time to buy quality stocks is when the rest of the market is fearful. As the company regains control over the situation, investors will regain their attraction to the stock, and you’ll want to be holding it when they do.

3)  While Coca-Cola Amatil’s dividend is expected to fall slightly this year, the forecast distribution is still 46 cents per share, franked to 75%. Grossed up, that’s a yield of 6.4%!

An even better bet than Coca-Cola Amatil

I happily own Coca-Cola Amatil shares. The long-term investment thesis remains intact and the solid dividend yield will bode very well for my portfolio over time.

Another stock I already own is also one the Motley Fool's top analysts have tapped as their number one stock pick for 2014 and beyond. This small-cap growth stock flies under the radar, yet is rapidly growing, and has a long runway ahead. The fully franked dividend is the icing on the cake. Click here now to claim your free copy of "The Motley Fool's Top Stock for 2014."

I own the stock, and think you should take a look too.

Motley Fool contributor Ryan Newman owns shares in Coca-Cola Amatil Ltd.

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