- Coca-Cola's recent operating results suggest that widely-suspected secular headwinds are taking their toll on revenue growth and operating margins. Management's revenue guidance was tempered as a result.
- The company anticipates maintaining earnings growth through cost-cutting measures and improved marketing efforts to restore the Coca-Cola brand, but I suspect this can only go so far.
- The company's premium valuation, which has been based on its historical operating reliability and cash flow quality, may be at risk.
Coca-Cola Is A Buy Due To Low Implied Dividend Growth
- Current valuation implies a 4% growth in dividend per share.
- Based on conservative assumptions, KO can easily sustain the 4% annual dividend growth over the next few years with both free cash flow and earnings payout ratios being very steady.
- The stock is a buy due to attractive risk/reward, as dividend growth range should be 4%-8% in the next few years.
- The recent earnings release was met with an uncharacteristic wave of selling.
- Coca-Cola is a defensive, low volatility play. The 6% post earnings drop is highly unusual.
- The article below summarizes my current thoughts on Coke.
- The stock appears to be fairly valued based on 2015 earnings estimates.
- The dividend is good, but has little room to grow with the current 65% payout ratio.
- I'm not going to be sharing my investments with Coke at this time.
Why Coca-Cola's Investors Are Paying A Bit Too Much
- Coca-Cola is a fantastic brand with a lovable product.
- However, investors know this, and that's why shares have been bid up to pricey levels.
- Management stated that it would miss its long-term EPS growth targets for both 2014 and 2015.
- The company's growth does not justify its valuation, and dividend growth may be muted given headwinds.
- The Coca-Cola Company delivered a disappointing earnings report, but investors need to think long-term.
- Despite in-line earnings and a revenue miss, I bought shares.
- I bent my buying rules to make this purchase.
Retirement Strategy: Is It Time To Dump These Dividend Aristocrats?
- There is no escaping the fact that both McDonald's and Coca Cola have had a rough year.
- The war on sugar and fast foods has been ramping up for years.
- Do these dividend aristocrats still belong in my retirement portfolio?
Note To Warren Buffett: Dump Coke, Pay Your Taxes, And Get On The Right Side Of History
- Coke dropped an earnings report bomb on the markets this week: volumes, revenues, and earnings came in below expectations.
- Coke has a steep macro hill to climb against market saturation and declining product acceptance, both domestic and international.
- The world may be onto harmful aspects of Coke products, and management may embody the problem: not good for you and wishful thinking that you wouldn't flag that compensation package.
- A little social consciousness in investing can be profitable, especially in cases like Coke.
- Valued like companies with similar slow growth, Coke is probably worth only a 15 P/E, roughly $27 - less than what you would keep after paying cap gains taxes.
Update: Coca-Cola's Mixed Q3 Doesn't Change The Long-Term Story
- Coca-Cola is a solid wide-moat business having dominant positions in beverages with long runway for growth.
- Coca-Cola reported flat Q3 earnings growth, driven by muted growth in emerging markets and declines in North America.
- I view Coca-Cola's Q3 result as being marked by various weather- and economic-related events, and not something likely to impact long-term positioning.
- Comparable currency neutral EPS +6% for Q3, but -13% as reported; confirmed that they will miss EPS growth target (6-8%) for 2014 and likely for 2015 too.
- Flat Revenue For The Quarter, -2% Year To Date.
- Restructuring Plan announced; is this the light at the end of the tunnel?
- KO issued an ugly long term profit warning yesterday and it spooked investors, sending shares down 6%.
- KO's growth initiatives should help over the long term but with 2014 and 2015 profit growth coming in light, is there any reason to own the stock?
- I still like KO long term but after recently selling my position I'm going to wait for lower prices to repurchase my shares.
Update: Coca-Cola Q3 Earnings, Looks Like I Was Wrong
- Adjusted EPS landed right on analyst projections at $.53.
- Revenues declined slightly. Analysts had predicted a slight increase.
- Eurasia & Africa performed well, as did the Asia Pacific segment.
- Latin America and North America saw declining revenues.
- I was optimistic on KO’s performance and expected stronger revenues. My long-term opinion hasn't changed, but I was wrong in the short term.
- Coca-Cola reported its Q3 results.
- EPS was inline with estimates while revenues missed.
- The company also updated its long-term outlook.
- Shares fell 6% on the news.
- At current prices Coca-Cola yields 3%.
Is Coca-Cola Still A Tasty Investment After Poor Q3 Results?
- Coca-Cola missed analyst expectations for its Q3 Earnings.
- The company's stock price is down to levels not seen since August.
- Despite negative results, Coca-Cola is still growing quickly in emerging markets.
Coca-Cola's Weak Q3 Earnings Are Sending Shares Lower; Should You Buy?
- Q3 earnings were announced before the market opened on October 21.
- The results were mixed compared to expectations.
- The stock has responded by falling 4% lower in pre-market trading.
Has Coke Made A Monster Mistake Or A Mountainous Misstep?
- Coca-Cola announced an investment in Keurig Green Mountain in February.
- Coke then announced a similar partnership deal with Monster Beverage in August.
- Coca-Cola is suffering from stagnating soda sales in its domestic market.
- Are these investments smart diversifications, or has Coke panicked over its soda business?
- KO and PEP are the favorites in the battle for sugar beverage dominance.
- But a smaller player is likely to offer better returns over the next 10 years.
- And it's not likely to be a player in the soda game at all.
Thu, Oct. 23, 1:34 PM
Tue, Oct. 21, 9:14 AM
Tue, Oct. 21, 9:01 AM
- Shares of Coca-Cola (NYSE:KO) decline in early trading after the company shows a year-over-year slide in profit during Q3.
- Volume growth in key regions was underwhelming for the soda seller.
- A warning from the company on missing a long-term profit growth forecast this year and next is also factoring in.
- KO -4.8% premarket to $41.25.
Tue, Oct. 21, 7:53 AM
Tue, Oct. 21, 7:50 AM
- Coca-Cola (NYSE:KO) announces a series of initiatives designed to stoke growth.
- The company plans to restructure its global supply chain, including manufacturing locations in North America.
- A new streamlined operating model will also be introduced aimed at driving efficiency.
- A long-term profit target of 6% to 8% is set by Coca-Cola, a level it doesn't see achieving in 2014 or 2015.
- A conference call with analysts has been set for 9:30 a.m. ET to discuss Q3 results and the initiative.
Mon, Oct. 20, 5:30 PM
Fri, Oct. 10, 2:05 PM
- There's more consumer staples names to add to the list of out-performers on the day with investors peeling off some tech and momentum favorites.
- The partial list below represents stocks up at least 1% on the day with a dividend yield of over 2%.
- Back in favor: AVP, KO, MO, RAI, BUD, PF, BGS, DPS, CPB, LO, DF.
Tue, Oct. 7, 3:39 PM
Tue, Oct. 7, 8:37 AM
- Shares of Keurig Green Mountain (NASDAQ:GMCR) are higher in early action despite a soft read from SodaStream (NASDAQ:SODA) on demand for home beverage systems.
- A strong initiation from Goldman Sachs on the stock is helping to offset any concerns on the category.
- Coca-Cola (NYSE:KO) has its eyes on the developments with its 10-year Keurig Cold partnership kicking off in 2015.
- If it's true that PepsiCo (NYSE:PEP) and Starbucks (NASDAQ:SBUX) have interest in SodaStream - there's some number-crunching going inside the C-suites there.
- GMCR +2.1% premarket, SODA -17.5%.
Fri, Oct. 3, 2:55 PM
Thu, Oct. 2, 9:27 AM
- We actually bought some stocks on the dip yesterday, says Warren Buffett (BRK.A, BRK.B), appearing on CNBC. More from The Oracle ...
- "I made a mistake on Tesco (OTCPK:TSCDF, OTCPK:TSCDY). That was a huge mistake by me."
- The new Coca-Cola (NYSE:KO) compensation plan makes "great sense." His involvement came only after being asked, and was not adversarial. "I feel as good about my Coke investment as I've ever felt."
- "It doesn't have anything to do with taxes," says Buffett, of the Burger King/Tim Horton's deal. He notes Tim Horton's earns twice as much money as BK, and the deal has to pass muster with Canadian regulators.
- Alibaba? "I don't think we've bought an IPO in over 50 years."
- Asked about today's announced purchase of a major auto dealer, Buffett says it's a play on the strength of the auto sector right now. "I fully expect we'll buy a lot more dealerships over time."
Wed, Oct. 1, 12:41 PM
- "Coca-Cola (KO -0.2%) has finally conceded that the equity compensation plan it put to a vote of shareholders in April was outrageously excessive and inconsistent with past plans," says David Winters, responding to changes announced today to the company's pay plan.
- Citing "shareholder engagement" a number of times in its press release (i.e. a chat with Warren Buffett), Coca-Cola says the new guidelines "further align compensation to the long-term interests of shareowners."
- The last word goes to Winters: "Today's statement by Coca-Cola only calls into question the competence and leadership of the board of directors and management. Much more work has to be done to revitalize Coca-Cola and restore trust in the company.”
Tue, Sep. 30, 9:07 AM
- Coca-Cola (NYSE:KO) has introduced a wearable device aimed at teenagers in the U.K.
- The fitness and sleep tracker is being promoted as a health monitoring device.
- The product is part of the company's global Movement Through Happiness campaign.
Thu, Sep. 25, 1:33 PM
- Coca-Cola's (KO -1%) sales have received a boost from the company's Share-A-Coke promotion.
- The personalization by name of bottles and cans has stirred interest, according to industry watchers. Some personalized Coca-Cola bottles and cans have even been put out for bid on eBay.
- Nielsen data indicates a 0.4% increase in Coke sales during a 12-week period in the summer to counter a long trend of sliding volume and help the company pick up market share against PepsiCo and Dr. Pepper Snapple.
- An official sales tally from the company comes out next month with Q3 earnings.
Wed, Sep. 24, 10:08 AM| 5 Comments
Tue, Sep. 23, 2:57 PM
- Soda sellers Coca-Cola (KO -0.6%), Dr. Pepper Snapple (DPS -2.1%), and PepsiCo (PEP -0.7%) sign a pact to work toward a goal of reducing calorie intake in the U.S.
- The voluntary agreement will see the companies market zero-calorie and low-calorie drinks and provide more calorie counts on products.
- The terms of the deal were negotiated by the American Beverage Association and the Alliance for a Healthier Generation.
KO vs. ETF Alternatives
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