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Coca Cola (KO)

Summary (from latest annual report)

  • Total stockholders' equity : 23.06 billion USD
  • Market Cap is 184.2 billion USD ( last price of the stock is 42.91 USD)
  • Coca-Cola Co manufactures, distributes and markets non-alcoholic beverage concentrates and syrups. It offers waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks
  •  Total stockholders' equity has decreased from 25.55 billion USD in 2015 to 23.06 billion in 2017
  • Company has 8.5 billion USD in cash on account (from latest annual report)
  • Company has 47.98 billion USD treasury stock (this is negative item in the balance sheet and because of this total stockholders' equity is only 23.06 billion USD)
  • In 2016 company had 29.68 billion USD long-term debt, short – term debt was 16.02 billion USD (In 2015 company had 28.40 billion USD long-term debt , short-term debt was 15.80 billion USD)
  • Company's revenue decreased in 2016 to 41.86 billion USD from 44.29 billion in 2015
  • Net income in 2016 was 6.52 billion USD, Net income in 2015 was 7.35 billion USD
  • In 2016 company paid 6.04 billion USD dividend to its shareholders

 

Opinion about the company

Fundamentally it is a very good company and in the future we can expect its growth (Total debt is big (45.7 billion usd), big amount of cash on company's account, ROE is around 26 %).

 

Very good stock for the long - term investors looking for solid dividend payments

Coca-Cola is one of the most recognizable consumer brands in the world. According to Forbes, Coca-Cola ranked as the 4th most valuable brand. Coca-Cola currently trades at a forward P/E of 21.8, which is within its historical average. This stock is protected by a rich yield that still seems to be well supported by predictable, stable free cash inflow. Company disbursed 92% of its free cash flow in the payment of dividends in 2016 ( My opinion is that Coca-Cola will have no problem maintaining its position as a reliable dividend payer). There aren't many stocks with a better track record of raising the dividend than KO. Net revenues were $41.9 billion for the full year, a 5% decline from the prior year, impacted by a foreign currency exchange headwind of 3% and a headwind from acquisitions, divestitures, and structural items of 6%. The bottling business is capital-intensive and is low-margin revenue. Refranchising will increase productivity and improve operating margins. My opinion is that Coca Cola is a stable stock and the company and they will not face a serious problems in the future.

For 2017 fiscal year company expects:

  • Approximately 3% growth in organic revenues (non-GAAP)
  • Income before taxes: 5% to 6% structural headwind
  • Net share repurchases (non-GAAP): Approximately $2.0 billion
  • Full Year 2017 EPS: Comparable EPS (non-GAAP) 1% to 4% decline versus $1.91 in 2016

KO stock price is correlated with situation in USA, global economic situation also affect on the price of this stock (especially  stock markets in USA..). KO stock price is highly correlated with NDX, SPX and DJIA.

 

Technical analysis

As long the price is above this trend line and $40 this stock is in the "BUY" zone and  there is no indication of trend reversal. If the price falls on the trendline and if we get "bullish" confirmation candle it would be a very good entry point. Trend line represents very strong support level, if the price breaks this trend line( and $40) it would be a very strong "SELL" signal and we have a open way to $37. If the price jumps above $45 (short term resistance level) that would be a confirmation of "BULLISH" trend and open way to $47 and $50.

 

Conclusion

Coca-Cola is one of the most recognizable consumer brands in the world. The fundamentals of the company are very good :KO currently trades at a forward P/E of 21.8, total debt is big but acceptable, revenue for fiscal 2016 was $41.86 billion, net income in 2016 was 6.52 billion USD, in 2016 company paid 6.04 billion USD dividend to its shareholders. There aren't many stocks with a better track record of raising the dividend than KO and my opinion is that Coca-Cola will have no problem maintaining its position as a reliable dividend payer. As long the price is above this trend line and $40 this stock is in the "BUY" zone and  there is no indication of trend reversal. My opinion is that this stock is good opportunity for the long term investors who are looking for solid dividend payments (Coca Cola is a stable stock and the company).

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