COCA-COLA CO/THE (KO)

US1912161007 - Common Stock

69.72  +0.15 (+0.22%)

Fundamental Rating

5

KO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 33 industry peers in the Beverages industry. KO scores excellent on profitability, but there are some minor concerns on its financial health. KO is quite expensive at the moment. It does show a decent growth rate.



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9

1. Profitability

1.1 Basic Checks

KO had positive earnings in the past year.
KO had a positive operating cash flow in the past year.
Each year in the past 5 years KO has been profitable.
In the past 5 years KO always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 10.52%, KO belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
KO has a better Return On Equity (41.19%) than 90.63% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.93%, KO belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
KO had an Average Return On Invested Capital over the past 3 years of 12.96%. This is in line with the industry average of 12.93%.
The 3 year average ROIC (12.96%) for KO is below the current ROIC(14.93%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 10.52%
ROE 41.19%
ROIC 14.93%
ROA(3y)10.54%
ROA(5y)10.16%
ROE(3y)41.12%
ROE(5y)42.1%
ROIC(3y)12.96%
ROIC(5y)12.39%

1.3 Margins

The Profit Margin of KO (22.92%) is better than 93.75% of its industry peers.
KO's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 29.58%, KO belongs to the top of the industry, outperforming 96.88% of the companies in the same industry.
KO's Operating Margin has been stable in the last couple of years.
The Gross Margin of KO (60.53%) is better than 96.88% of its industry peers.
In the last couple of years the Gross Margin of KO has remained more or less at the same level.
Industry RankSector Rank
OM 29.58%
PM (TTM) 22.92%
GM 60.53%
OM growth 3Y-0.91%
OM growth 5Y-0.63%
PM growth 3Y-0.07%
PM growth 5Y4.54%
GM growth 3Y0.12%
GM growth 5Y-0.78%

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4

2. Health

2.1 Basic Checks

KO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for KO has been reduced compared to 1 year ago.
The number of shares outstanding for KO has been increased compared to 5 years ago.
KO has a worse debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 4.36 indicates that KO is not in any danger for bankruptcy at the moment.
The Altman-Z score of KO (4.36) is better than 81.25% of its industry peers.
The Debt to FCF ratio of KO is 4.84, which is a neutral value as it means it would take KO, 4.84 years of fcf income to pay off all of its debts.
KO has a better Debt to FCF ratio (4.84) than 71.88% of its industry peers.
KO has a Debt/Equity ratio of 1.62. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.62, KO is not doing good in the industry: 81.25% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 1.62
Debt/FCF 4.84
Altman-Z 4.36
ROIC/WACC1.86
WACC8.02%

2.3 Liquidity

KO has a Current Ratio of 1.08. This is a normal value and indicates that KO is financially healthy and should not expect problems in meeting its short term obligations.
KO has a worse Current ratio (1.08) than 68.75% of its industry peers.
KO has a Quick Ratio of 1.08. This is a bad value and indicates that KO is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.92, KO perfoms like the industry average, outperforming 53.13% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.08
Quick Ratio 0.92

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4

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 7.31% over the past year.
KO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.18% yearly.
KO shows a small growth in Revenue. In the last year, the Revenue has grown by 5.27%.
KO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.93% yearly.
EPS 1Y (TTM)7.31%
EPS 3Y11.32%
EPS 5Y5.18%
EPS Q2Q%7.69%
Revenue 1Y (TTM)5.27%
Revenue growth 3Y11.49%
Revenue growth 5Y5.93%
Sales Q2Q%2.9%

3.2 Future

Based on estimates for the next years, KO will show a small growth in Earnings Per Share. The EPS will grow by 6.84% on average per year.
KO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.44% yearly.
EPS Next Y9.23%
EPS Next 2Y7.8%
EPS Next 3Y7.52%
EPS Next 5Y6.84%
Revenue Next Year1.2%
Revenue Next 2Y2.95%
Revenue Next 3Y3.76%
Revenue Next 5Y3.44%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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3

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 24.99, the valuation of KO can be described as rather expensive.
KO's Price/Earnings is on the same level as the industry average.
KO is valuated rather cheaply when we compare the Price/Earnings ratio to 31.52, which is the current average of the S&P500 Index.
KO is valuated rather expensively with a Price/Forward Earnings ratio of 22.30.
KO's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of KO to the average of the S&P500 Index (22.55), we can say KO is valued inline with the index average.
Industry RankSector Rank
PE 24.99
Fwd PE 22.3

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, KO is valued a bit more expensive than the industry average as 68.75% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KO is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 33.19
EV/EBITDA 21.27

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
KO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.71
PEG (5Y)4.83
EPS Next 2Y7.8%
EPS Next 3Y7.52%

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6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.80%, KO has a reasonable but not impressive dividend return.
KO's Dividend Yield is a higher than the industry average which is at 2.82.
KO's Dividend Yield is a higher than the S&P500 average which is at 2.22.
Industry RankSector Rank
Dividend Yield 2.8%

5.2 History

The dividend of KO has a limited annual growth rate of 3.40%.
KO has been paying a dividend for at least 10 years, so it has a reliable track record.
KO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.4%
Div Incr Years33
Div Non Decr Years33

5.3 Sustainability

75.57% of the earnings are spent on dividend by KO. This is not a sustainable payout ratio.
The dividend of KO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP75.57%
EPS Next 2Y7.8%
EPS Next 3Y7.52%

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COCA-COLA CO/THE

NYSE:KO (10/14/2024, 10:10:09 AM)

69.72

+0.15 (+0.22%)

Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap300.48B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 2.8%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 24.99
Fwd PE 22.3
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.71
PEG (5Y)4.83
Profitability
Industry RankSector Rank
ROA 10.52%
ROE 41.19%
ROCE
ROIC
ROICexc
ROICexgc
OM 29.58%
PM (TTM) 22.92%
GM 60.53%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.46
Health
Industry RankSector Rank
Debt/Equity 1.62
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.08
Quick Ratio 0.92
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)7.31%
EPS 3Y11.32%
EPS 5Y
EPS Q2Q%
EPS Next Y9.23%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)5.27%
Revenue growth 3Y11.49%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y