Coca-Cola hears more criticism

Coca-Cola (KO -0.4%) is hearing more criticism than praise this week after its Q4 report came in disappointing and management didn't pull out any stunning growth ideas during the firm's earnings call.

Sanford Bernstein's Ali Dibadj would like to see more cash funnel to shareholders after even deeper cost-cutting across the board.

Edward D. Jones' Jack Russo is in agreement, noting emerging markets turmoil is likely to continue to drag down results. He would like to see shareholders get a dividend boost to make up for the sluggish pace of EPS growth.

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Comments (15)
  • JD in NJ
    , contributor
    Comments (1635) | Send Message
    What? A dividend boost to make up for EPS growth? That concept makes no sense to me.


    Shouldn't the size of dividend boosts be driven by the growth in EPS?
    19 Feb 2014, 10:57 AM Reply Like
  • AnAvgJoe
    , contributor
    Comments (564) | Send Message
    Just clicked here to post a nearly identical comment JD - you beat me to it. Ridiculous statement.
    19 Feb 2014, 10:59 AM Reply Like
  • Rose_Colored_Glasses
    , contributor
    Comments (1115) | Send Message
    @ JD/Avg Joe -
    I agree with your comments - but if you want to be a divvy titan, sometimes you grease the shareholders a bit. Lets face it, the companies that raised their dividend in 2009 probably felt a little pain in the short and curlies - but now when I read a divvy champion list - it means a lot to me. I really respect and value the companies that paid out during those extremely tough times. I am like - hey I can trust KO during the tough times. Besides, I have had a coke and a frown - tomorrow I get a coke and a smile. But still you guys are right, if the cash outflow would hurt the company - I could care less about 2 pennies.
    19 Feb 2014, 04:24 PM Reply Like
  • Forward Looker
    , contributor
    Comments (3) | Send Message
    Agree, balance sheet becoming weaker due to need for cash to sustain dividend and increases everyone is looking for. Very long time holders are living in the past.
    19 Feb 2014, 04:29 PM Reply Like
  • JD in NJ
    , contributor
    Comments (1635) | Send Message


    I was careful to say "the size of dividend boosts" because I think KO should also strive to maintain its standing as a giant of dividend growth. But if the percentage is smaller than usual this year due to business conditions I won't weep too hard about it.
    19 Feb 2014, 05:06 PM Reply Like
  • Cfritter
    , contributor
    Comments (67) | Send Message
    I guess cause Coke has such a strong cash flow still, that should be used to prop up a dividend boost since the company isn't "growing" anymore. Sure lets just turn Coke into a Bond with a 3.25% yield.
    19 Feb 2014, 11:00 AM Reply Like
  • Mike Serebrennik
    , contributor
    Comments (1247) | Send Message
    In fact, share buybacks would better make up for sluggish organic EPS growth. Care to post your dividend raise prediction? I say 30 cents per share.
    19 Feb 2014, 11:10 AM Reply Like
  • Delta13
    , contributor
    Comments (29) | Send Message
    Not to mention currency head winds, I agree, continue or increase share buybacks is the only sensible move for 2014.
    19 Feb 2014, 11:46 AM Reply Like
  • jgbrowning
    , contributor
    Comments (417) | Send Message
    Whiny short-term-looking wankers.


    Ok, that's a bit harsh, but that was my first impression of the critics. :-)
    19 Feb 2014, 11:45 AM Reply Like
  • Rose_Colored_Glasses
    , contributor
    Comments (1115) | Send Message
    @ jgbrowning -
    I was forced to "like" your comment solely for the usage of the word "wankers". A truly great word from our friends across the pond.
    19 Feb 2014, 04:26 PM Reply Like
  • Tradevestor
    , contributor
    Comments (5018) | Send Message
    Whether we ask for it or not, there is a dividend increase coming up tomorrow.

    19 Feb 2014, 12:14 PM Reply Like
  • adarmon
    , contributor
    Comments (19) | Send Message
    Would it make more sense for KO to purchase a non-beverage staple? And would a private deal involving W Buffet on KO buying Heinz make any sense for KO and BRK?
    19 Feb 2014, 04:29 PM Reply Like
  • robsmurfy
    , contributor
    Comments (304) | Send Message
    30c expected but risk could be less. Op cash flow $10.5bn in 13 -should be down to say $10bn or less in 14. With buyback $2.5-3bn and capex $2.5-3bn leaves 4-5bn for divi so not much headroom unless they take on more debt (likely to lead to further derating of stock) or use asset sales (not necessarily sustainable).
    19 Feb 2014, 05:55 PM Reply Like
  • 50 cent it is
    , contributor
    Comments (1453) | Send Message
    I guess cutting costs has not occurred to management
    Buffet hired a firm to cut cost at Heinz after he bought it.
    Companies should make serious efforts to pair costs before someone does it for them
    19 Feb 2014, 07:44 PM Reply Like
  • slam stocks
    , contributor
    Comments (1454) | Send Message
    Bought some shares today and happily locked into a nice 3% yield with another increase hopefully expected. The company has survived 51+ consecutive years of Dividend increases for the #1 brand in the world. This short term problem will eventually go away. Not worried and looking forward to further dips to add into my long-term position.
    19 Feb 2014, 08:21 PM Reply Like
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