KO  The Coca-Cola Company

Exchange

NYSE

Sector

Consumer Non-Durables

Industry

Beverages (Production/Distribution)

Market Cap.

196.27B

Vuru Grade

58.07/100

Current Price

$46.02
+0.035 (+0.076%)

Growth Price

$17.67
Overvalued by 61.59%

Company Metrics

  • P/E 48.59
  • P/S 5.047
  • P/B 8.919
  • EPS 0.947
  • Cash ROIC 18.97%
  • Cash Ratio 0.84
  • Dividend 1.48 / 3.21%
  • Avg. Vol. 9.21M
  • Shares 4.27B
  • Market Cap. 196.27B

Company Description

The Coca-Cola Company manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. It principally offers sparkling and still beverages. The company's sparkling beverages include nonalcoholic ready-to-drink beverages with carbonation, such as energy drinks, and carbonated waters and flavored waters. Its still beverages consist of nonalcoholic beverages without car... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

The Coca-Cola Co Is Best of the Soda Stocks (KO)
U.S. News & World Report - Oct 25, 2017
The Coca-Cola Co (NYSE: KO) reported strong third-quarter numbers on Wednesday morning, reasserting its dominant position in the struggling carbonated beverage business.
Leadership Change at Coca-Cola Co. - CSPDailyNews.com
The Coca-Cola Co (KO) Reports Better-Than-Expected Earnings - Investorplace.com
Coca-Cola to test aftertaste-free stevia soda abroad
Atlanta Business Chronicle - Nov 17, 2017
The Coca-Cola Co. (NYSE: KO) said it will test a soda recipe outside the U.S. next year that has no no sugar and zero calories -- sweetened with stevia instead.
Coca-Cola Bid for Amazon Shoppers Means Boosting Digital Lineup - Bloomberg
Is Alcohol Next On Tap For The The Coca-Cola Co? (KO) - StockNews.com (blog)
For Investors, the Coca-Cola Co Stock Is No Longer It
Investorplace.com - Oct 27, 2017
One of my first purchases ever in the stock market, back in 1996, was The Coca-Cola Co (NYSE:KO). Back then, I considered KO stock to be a slam-dunk no-brainer.
Cramer argues that growth-challenged Coca-Cola should buy Monster Beverage - CNBC
The Coca-Cola Co (KO): Investment Thesis on Why KO Is a Buy - Insider Monkey (blog)
Coca-Cola not yet giving up on sugar, aiming Georgia Peach Coke at millennials
Atlanta Business Chronicle - Nov 1, 2017
While The Coca-Cola Co. (NYSE: KO) pivots its direction away from sugar and toward options like sparkling water, the company is also adding two new flavors to its full-sugar core soda line -- Georgia Peach and California Raspberry -- in 2018.
The Coca-Cola Co completes refranchising operations in the US - just-drinks.com
Cramer: The Coca-Cola Co (KO) Needs To Be Aggressive In Acquisitions - StockNews.com (blog)
Coca-Cola Bottling Co. UNITED execs honored by Newcomen Society
AL.com - Nov 15, 2017
Left to right, Raymond J. Harbert, chairman and CEO of Harbert Management Corp. and 2017 chairman of the Newcomen Society of Alabama; Coca-Cola Bottling Company Chairman Claude Nielsen, and John Sherman, president and CEO, Coca-Cola ...
Coca-Cola brand presence to leave Danville - GoDanRiver.com
The Buy And Hold Case For Coca-Cola - Benzinga
Not There, Yet: What Level Makes The Coca-Cola Co Stock Interesting?
Investorplace.com - Oct 26, 2017
There is a reason nobody really cares about KO earnings. The growth narrative is consistent and the stock isn't all that exciting.
The Coca-Cola Co CEO eyes "adult craft beverages" space - just-drinks.com
Coca-Cola ditched Coke Zero brand to attract more consumers - Stuff.co.nz
EOD Risers: Pfizer Inc., Procter & Gamble Co, The Coca-Cola Co, Travelers ...
DirectorsTalk Interviews - 22 minutes ago
The share price for The Coca-Cola Co with company EPIC: (NYSE:KO) a beverage company, moved up 0.7% or 0.32 points throughout yesterday's trading day.
How Coca-Cola, Netflix, and Amazon Learn from Failure
Harvard Business Review - Nov 10, 2017
Why, all of a sudden, are so many successful business leaders urging their companies and colleagues to make more mistakes and embrace more failures?
Coca-Cola Aims to Solve Stevia Aftertaste Problem With New Drink
Bloomberg - Nov 16, 2017
Coca-Cola and PepsiCo Inc. are locked in a high-stakes contest to find more palatable alternatives to sugar. Many consumers have shunned earlier sweeteners like aspartame, and sugar itself has been blamed for contributing to the obesity epidemic.
Mum with addiction to Coca-Cola drank five cans every day
Metro - 23 hours ago
A mum-of-two has turned her life around by ditching her addiction to Coca-Cola that left her drinking five cans of the fizzy drink every day.
22-stone mum sheds HALF her body weight after ditching her fizzy drinks habit - The Sun
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for KO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate KO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$46.02 Current Price

$17.67 Growth Price (DCF)

Overvalued by 61.59%


Growth Rate Assumed by Market: 34.23%


Future Free Cash Flow Growth Rate: 5.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

Excellent Cash Return on Invested Capital over the past 5 years

KO has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

KO has created $18.97 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 7.87B 7.99B 8.21B 7.98B 6.53B
divided by
Invested Capital 41.80B 41.98B 37.97B 43.26B 38.54B
Cash ROIC 18.81% 19.04% 21.62% 18.43% 16.96%

Excellent Return on Equity over the past 5 years

Over the past 5 years, KO has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

KO has generated $21.21 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 9.09B 8.63B 7.12B 7.37B -
divided by
Stockholders' Equity 32.79B 33.17B 30.32B 25.55B 23.06B
Return on Equity 27.71% 26.00% 23.50% 28.83% -

Excellent Business Performance over the past 10 years

KO has been able to maintain profitability in good times and bad. This could mean KO has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

KO has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 5.50B 5.60B 6.19B 7.32B 6.55B 7.87B 7.99B 8.21B 7.98B 6.53B

Weak Balance Sheet

KO's financial position is not ideal. The key is to check whether KO is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 4.31B 4.98B 9.21B 11.34B 14.04B 16.55B 20.27B 21.68B 19.90B 22.20B
Current Assets 12.11B 12.18B 17.55B 21.58B 25.50B 30.33B 31.30B 32.99B 33.40B 34.01B
Total Assets 43.27B 40.52B 48.67B 72.92B 79.97B 86.17B 90.06B 92.02B 90.09B 87.27B
Current Liabilities 13.23B 12.99B 13.72B 18.51B 24.28B 27.82B 27.81B 32.37B 26.93B 26.53B
Total Liabilities 21.53B 20.05B 23.87B 41.92B 48.34B 53.38B 56.88B 61.70B 64.54B 64.21B
Stockholder' Equity 21.74B 20.47B 24.80B 31.00B 31.64B 32.79B 33.17B 30.32B 25.55B 23.06B
Current Ratio 0.92 0.94 1.28 1.17 1.05 1.09 1.13 1.02 1.24 1.28
TL-to-TA 0.50 0.49 0.49 0.57 0.60 0.62 0.63 0.67 0.72 0.74

Consistent Reinvestment of Profits over the past 10 years

KO has consistently retained profits. This may put KO in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, KO can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 36.24B 38.51B 41.54B 49.28B 53.55B 58.05B 61.66B 63.41B 65.02B 65.50B
Retained Earnings Growth - 6.29% 7.85% 18.64% 8.67% 8.39% 6.23% 2.83% 2.54% 0.74%

Inconsistent Net Profit Margins over the past 10 years

KO potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$18.24 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 5.98B 5.81B 6.82B 11.81B 8.57B 9.09B 8.63B 7.12B 7.37B -
divided by
Revenue 28.86B 31.94B 30.99B 35.12B 46.54B 48.02B 46.85B 46.00B 44.29B -
Net Profit Margin 20.73% 18.18% 22.02% 33.63% 18.42% 18.92% 18.41% 15.49% 16.63% -

Varying Pricing Power over the past 10 years

KO has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$59.91 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 18.45B 20.57B 19.90B 22.43B 46.54B 28.96B 28.43B 28.11B 26.81B -
divided by
Revenue 28.86B 31.94B 30.99B 35.12B 46.54B 48.02B 46.85B 46.00B 44.29B -
Gross Margin 63.94% 64.39% 64.22% 63.86% 100.00% 60.32% 60.68% 61.11% 60.53% -

Medium Capital Intensity over the past 10 years

KO has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

30.23% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 1.65B 1.97B 1.99B 2.22B 2.92B 2.78B 2.55B 2.41B 2.55B 2.26B
divided by
Net Income 5.98B 5.81B 6.82B 11.81B 8.57B 9.09B 8.63B 7.12B 7.37B -
Capital Expenditure Ratio 27.55% 33.89% 29.21% 18.76% 34.06% 30.60% 29.56% 33.77% 34.66% -

Very Strong Dividend History over the past 10 years

KO has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests KO is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 3.15B 3.52B 3.80B 4.07B 4.30B 4.60B 4.97B 5.35B 5.74B 6.04B
divided by
Shares Outstanding 2.33B 2.34B 2.33B 2.33B 2.32B 4.58B 4.51B 4.45B 4.41B -
Dividend Paid Per Share 1.35 1.51 1.63 1.74 1.85 1.00 1.10 1.20 1.30 -
Price at Year End 55.10 40.91 54.35 63.66 69.97 35.97 41.09 42.76 43.57 41.46
Dividend Yield 2.45% 3.68% 3.00% 2.74% 2.65% 2.79% 2.68% 2.81% 2.99% -

History of Stock Buybacks over the past 10 years

KO has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 2.33B 2.34B 2.33B 2.33B 2.32B 4.58B 4.51B 4.45B 4.41B -
Stock Bought Back - -0.21% 0.30% -0.17% 0.43% -49.32% 1.66% 1.33% 1.02% -
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Discussion
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4
Posted by pbanik  (on September 18, 2012)
KO is expensive to buy right now, so what totallyrad510 said is correct. I would try to buy the stock somewhere under $25 if you're looking for an entry point. It's trading at over 20 times earnings. It might be worth looking at when it is trading at 12 times earnings or lower. EPS has only increased $0.01/share since the same quarter last year, so it's not a growth stock by any means.
http://financials.morningstar.com/income-statement/is.html?t=KO&region=USA&culture=en-us
1
Posted by Manju  (on July 18, 2012)
at what rate is it best to by KO for long term
1
Posted by totallyrad510  (on September 16, 2012)
The lowest possible. I recently went in for a semi-long term investment. See how the market looks Monday.