The Coca-Cola Company

The Coca-Cola Company

KO (NYSE)

Website:  www.coca-cola.com

Sector:  Consumer Staples
Beta Coefficient: 0.49
10 Yr Compound EPS Growth:  8%
10 Yr Compound DPS Growth   9.5%

Dividend raises, last 10 years: 10 times.


Financial Result Year 2014

Revenues (m)   45,998
Net Income (m)   9,091
EPS  2.04
DPS 1.22
Cash flow per share 2.53
Current yield 3.2%

High Price  45.0  P/E 22.1   DY 2.71%
Low Price  36.9  P/E 18.1   DY  3.31%


The Coca-Cola Company is the world's largest beverage company.  

For more than 100 years, the company has mainly produced concentrates and syrups, which it then bottles or cans itself or sells to independent bottlers worldwide.  

It took a big step to own the supply chain in 2010 with the acquisition of bottler Coca-Cola Enterprises" North Amercian operations; CCE still handles distribution for Europe.

Independent bottlers add water ingredients, then bottle and distribute the products to restaurants, retailers and other distributors.  

The company owns the brand and is responsible for consumer brand marketing initiatives, while the distributors handle all downstream merchandising.

The company operates in more than 200 countries and markets nearly 500 brands of concentrate and finished beverages.

In terms of unit case volume, 79% of all sales are overseas - 29% in Latin America, 15% in Eurasia/Africa, 21% in the Pacific and 14% in Europe.

In terms of revenues, the company counts about 57% as overseas sales.

With $18 billion in cash in hand, Coke has made many strategic acquisitions.  Coke has the means.

Cash returns to investors are decent on both the buyback and dividend front, with high single-digit to 10% dividend raises the norm, even with flat performance.

For a company this size, it still make 20% net profit margin.  

Warren Buffett said he'll never sell a single one of the 400 million shares of Coke stock he owns.  "I like to bet on sure things."

Coke has category leadership, especially, in soft drinks, juices and juice drinks, and ready to drink coffees and teas.

They are number two globally in sports drinks and number three in packaged water and energy drinks.  

In Coca Cola, Diet Coke, Sprite and Fanta, they own four of the top five brands of soft drink in the world.

The Coca Cola name is probably the most recognized brand in the world and is almost beyond valuation.

The company have raised dividends in each of the past 53 years, and returned some $8.5 billion out of $10.5 billion in cash generated to shareholders in 2013.

Dividend raises, last 10 years: 10 times.

It is also a pure play on international business as you will find in a US company.

The low beta of 0.49 continues to confirm its low-volatility credentials.

This is a slow, steady growth story, which may be too slow for many, with new risks the company didn't face when Mr. Buffett bought in years ago.