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Shareholders of the Coca-Cola Company (KO) approved a 2-for-1 stock split back on July 10, 2012, and the split is scheduled to occur on or about August 10. It is the first stock split in the past 16 years and the 11th in KO's 92-year history. What does this mean for the common shareholder though? A 2-for-1 stock split gives current shareholders double the number of shares but halves the share price. So in other words, the investment retains the same dollar amount. The dividend is also cut in half. Many investors see KO as a dividend growth stock. Over the past five years, the dividend has increased 50% to $0.51 per share per quarter (pre-split). After the split, the dividend will be $0.255 per share per quarter, which will still give the stock approximately a 2.5% yield. Since 2000, the company has increased its dividend payments approximately 10% per year, increasing the quarterly dividend rate 200% from $0.17 per share.

From a dividend standpoint, KO continues to be an extremely safe investment with more than $14 billion of cash and equivalents on the balance sheet as of the end of the second quarter. During the first six months of 2012, KO repurchased 34.6 million outstanding shares for an aggregate cost of $2.53 billion. Following the stock split, management should continue to be aggressive with respect to purchasing shares.

KO has surpassed the Street's earnings per share expectations in each of the past four quarters, and still has room to grow. Stocks historically see a stock split as a positive as it allows "smaller" investors to put their money to work. I like KO much more than PepsiCo (PEP) on its growth overseas and its relative strength in North America, which still accounts for 44% of total revenue. During the second quarter of 2012, only the European segment saw a revenue and volume decline compared with the second quarter of 2011. The Pacific and Eurasia/Africa segments showed strong revenue growth (+7.4% and +4.5%, respectively) and volume growth (+8.0% and +12.0%, respectively) as well.

The stock is off its highs of the year (not much), but I do view any weakness in the stock as a buying opportunity. I would wait until after the stock splits as the record date (similar to the ex-dividend date) has passed so new shares will be not distributed to new shareholders.

Source: Preparing For Coca-Cola's Split