Entering text into the input field will update the search result below

Will Coca-Cola Accelerate Its Dividend Growth Next Month?

Jan. 11, 2019 3:07 PM ETThe Coca-Cola Company (KO)35 Comments
Aristofanis Papadatos profile picture
Aristofanis Papadatos


  • Coca-Cola failed to grow its revenues and its earnings for several years.
  • However, the change of its CEO has proved a game changer so far.
  • Coca-Cola is likely to accelerate its dividend growth.

Coca-Cola (NYSE:KO) has raised its dividend at a slow pace in the last five years. This is natural, given the absence of earnings growth over this period. However, the company recently returned to its long-term growth trajectory. Therefore, the big question is whether the company will accelerate its dividend growth next month when it announces its next dividend hike.


Coca-Cola has dramatically underperformed the market in the last five years. During this period, the stock has gained 12%, whereas the S&P has rallied 52%. The reason behind this disappointing performance is the decrease in the revenues and earnings throughout this period. Since 2013, the revenues of Coca-Cola have decreased 31% while its earnings have remained essentially flat. The plunge in revenues can be mostly attributed to the re-franchising of the bottling operations, but the absence of growth in the bottom line is certainly disappointing.

As the beverage giant has essentially expanded in every single country in the world, it has become very hard to continue to grow at a decent pace. In addition, consumers are becoming increasingly health-conscious every year. Consequently, they tend to reduce their consumption of soda. To be sure, the U.S. soda consumption per capita has fallen to a 30-year low level, while the total U.S. soda consumption has decreased for 12 consecutive years. As the flagship segment of Coca-Cola still generates about half of its total sales, the above secular trend is a strong headwind for its overall performance.


Coca-Cola changed its CEO about one and a half year ago. The quality of management is paramount in the business performance of every company. Indeed, the change in the CEO position has proved a game changer for the beverage stalwart so far.

After several years without growth, the company grew its comparable earnings per share

This article was written by

Aristofanis Papadatos profile picture
I am a chemical engineer with a MS in Food Technology and Economics. I am also the author of 2 mathematics books ("Arithmetic calculations without a calculator" and "Word Problems") and perform almost all the calculations in my mind, without a calculator, making it easier to make immediate investing decisions among many alternatives. I invest applying fundamental and technical analysis and mainly use options as a tool for both investing and trading. I have nearly achieved my goal of early retirement, at the age of 45. In my spare time, I follow Warren Buffett's principle: "Some men read playboy. I read financial statements".

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.