Here is a long-term analysis of the Coca-Cola Company (KO, Financial). The article gives investors an overview of the company’s financial history, business diversification as well as the valuation level and dividend policy.
Company Profile:
The Coca-Cola Company is a non-alcoholic beverage company that serves more than 500 non alcoholic brands. Coca-Cola Company has operations in more than 200 countries and employs more than 139,600 people. It owns and markets sparkling beverage brands, including Diet Coke, Fanta and Sprite. In addition, Coca-Cola manufactures, markets and sells beverage concentrates.
Business Diversification:
As of the latest quarter, the company operated in six segments: Eurasia & Africa (6% of sales and 10% of profits), Europe (11% of sales and 27% of profits), Latin America (11% of sales and 28% of profits), North America (43% of sales and 18% of profits), Pacific (11% of sales and 17% of profits) and Bottling Investments (18% of sales and 0% of profits). In fiscal 2010, roughly 70% of sales came from abroad. Due to the acquisition of the North American bottling company, Coca-Cola generates more revenues in USD.
Valuation of the Company:
Dividend Yield: 2.76% / 2.75% expected
Payout Ratio: 34.78%
5-Year Dividend Growth: 9.26%
Market Capitalization: 156.08 Billion
Cash and Short Term Investments: 12.27 Billion
Long-Term Debt: 12.68 Billion
Cash flow from Operations: 9.5 Billion
CAPEX: 2.2 Billion
All pricing measures decreased over the past ten years. Price to earnings fell by 55%, price to book ratio slipped in total 53%, price to sales ratio decreased 28% and price to cash flow ratio is finally 36% lower than 10 years before.
Long-Term Fundamentals and Dividends:
The company had a strong track record. Sales of Coca-Cola rose 100% over the past decade. Earnings before taxes and interest (EBIT) increased by 151% and net income finally grew in total 196%. Due to share buybacks, earnings per share rose 216%.
Coca-Cola paid dividends since 1893. The company raised dividends for 48 consecutive years. The next Ex-Div. Date is June 13, 2011. Payments will be received on July 01, 2011. The next dividend is the second quarter dividend at the same rate ($0.47).
Competitors:
The Coca-Cola Company has with PepsiCo (PEP, Financial) a big rival in North America and abroad. Additional national competitors are Hansen Natural (HANS, Financial) and Dr. Pepper Snapple Group (DPS, Financial).
Consensus Developments:
According to Reuters, 18 analysts covered Coca-Cola and submitted an outperform rating with a mean target price of $75.43 as of May 13, 2011. This value represents an upside of 10.6% compared to the close end price of May 13, 2011. The mean target price estimate increased over the past 18 months by 23.8%.
Related Stock Ticker Symbols:
KO, PEP, HANS, DPS
Full Disclosure: Long Coca-Cola, not intended to buy any stocks or obligations of the company within the next 72 hours. I don’t receive any compensation by the company.
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Disclaimer:
The presented data and material is for informational purposes only. Despite careful research, we cannot guarantee the truth of the figures. The past operational performance as well as the stock performance and dividend developments does not guarantee a positive future performance. Please, before you buy or sell any stocks, you should do your own research and reach your own conclusion.
