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Here's Why I Poured My Coca-Cola Shares Down The Drain

May 02, 2021 6:22 PM ETThe Coca-Cola Company (KO)PEP, MNST287 Comments
C Jessen profile picture
C Jessen


  • Coca-Cola has seen its annual dividend raises dwindle to meager penny raises while also seeing share float reductions dwindle.
  • Having increased debt load, interest expenses, and leverage significantly, I find that management is challenged by its promise of maintaining its dividend king status reducing flexibility and marketplace options.
  • The payout ratio is hovering around 80% measured on free cash flow with limited possibility of reducing that significantly and adversely impacting future potential hikes.
  • Being consistently priced at forward P/E 20+, I conclude a mismatch between market price and what the company can offer its investors reducing the attractiveness of its stock.
  • Coca-Cola will be here many decades from now, but there are other options within consumer staples who provide a better outlook for income investors looking for dividend raise maximization.
Number of 2019 to 2021 on stones footpath
Photo by baona/E+ via Getty Images

Investment Thesis

Like many others, I’ve owned Coca Cola Company (NYSE:KO) shares with the expectation of seeing rising dividends tick into my account. Having seen Coca-Cola provide shareholders with a penny a quarter raises for the last two years, I finally

This article was written by

C Jessen profile picture
Early 30s 'buy and hold' investor trying to achieve financial freedom to the greatest extent possible. Main focus within dividend growth investing & value. I've been investing for 10+ years and worked across several industries including finance, logistics, oil and pharma. Holding a Graduate Diploma within Accounting and MSc within Business Administration & Supply Chain Management.I cover companies matching my focus as well as portfolio strategy

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.

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Comments (287)

Woke Coke up. It has awaken.
StockMarketMorty profile picture
Just came back to thank you all for selling me those 'WOKE' shares...they definitely ARE NOT SLEEPING, so you may be right! $56 xD
latest Nielsen Report.... KO is highly regarded by consumers.
the horse has bolted from the stable. but consumer staples are not stable when coca is no longer in the cola.
Go back to the old days and add 3.5 grams of Cocaine to each bottle.

Sales will explode.....
I decided to sell my entire position in KO as well this year. Much more deserving companies out there for my dough.
What is the author's actual dividend-based price or prices paid for the stock? I don't like to use the expression cost basis.
LOOK OUT! KO up again today!!!
Please everyone! I wonder if everyone will keep selling KO for PEP & BRK.B?
I am counting on it. LOL
StockMarketMorty profile picture
@SPUDRULZ31 The tiny, whiny babymen...
made the wrong decision AGAIN!

The JOKE is that they SOLD COKE for being 'WOKE'
@StockMarketMorty at the right price, KO will always be a good buy, Woke or sleeping.
It should not be too hard to diversify into snacks- hire a strong mgr. from PEP. I'd like to see a push toward healthier snacks that still have appeal! I'd also like to see some soft drinks with perhaps 20 or 25 calories to get a bit sweeter flavor but not too much sugar! also- buy Izze - its a great sparkling juice drink! (whoops- missed the boat- I see PEP already bought IZZE (I'll hold both my KO and PEP shares)
The average commenter on 4chan has more brain cells than the idiots commenting on this article.
@Jackalope53 Which way do you pull the average? But, I already like your handle. (don't know what 4chan is - is it one more than 3 stooges?)
Veritas1010 profile picture
“...less white”.

Imagine a company of this size, magnitude and international reach saying “we need to be less Black, or Oriental...”, etc, etc.

What is more distressful is the establishment élites see no incongruity here as been racist.

I am sure glad I said adieu to this warped enterprise awhile ago.
LONG KO! Despite the challenges and the whining on this post. Please sell and buy PEP. LONG PEP! Currently making money either way. Nothing like making money off market psychology. LOL
@SPUDRULZ31 Be careful what you wish for.
When MCD changes their soft drink brand is when I’ll worry, for now long KO and drip.
@Dragonox90 It's coming. Pepsi on a campaign to take over the burger joints.
Different thought to challenge the ' Woke Crowd ' .... Hold, definitely continue DRIP and even Buy, then Organize as just happened to Exxon, vote as a organized Block putting the Woke Folks on Unemployment..
I have used store brands for years and am now quite accustomed to the minor difference in taste. There are many who will probably do the same now that inflation in food products and other segments are rising much faster than reported in the government's CPI.
Dr.DaveR profile picture
No Coke, Pepsi
Garbage product..Garbage management
Coke , 500 brands,200 country’s
ransim7222 profile picture
@brokenbug BRK.B beats KO by several multiples over 1, 5, and 10 years. A 3 or even 5% dividend does not even begin to close the gap, so why own KO? If you sell KO and buy BRK.B you get KO automatically as well as far superior performance.
@brokenbug And they're still concerned about their dividend.
nick_the_professor profile picture
Great analysis. Every company at some point becomes mature and growth opportunities become harder and harder to find. Reminds me of Exxon. The past may have been better times but it is what what opportunities are in the futures. KO strictly for the dividend isn't worth it on yield alone. I agree.
@handglidergirl Congratulations handglidergirl
StockMarketMorty profile picture
@handglidergirl they are shaking in their boots, im sure
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