COCA-COLA CO/THE (KO) Stock Fundamental Analysis
NYSE:KO - New York Stock Exchange, Inc. - US1912161007 - Common Stock - Currency: USD
KO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 32 industry peers in the Beverages industry. While KO has a great profitability rating, there are quite some concerns on its financial health. KO is quite expensive at the moment. It does show a decent growth rate.
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.
In the past 5 years KO has always been profitable.
KO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
KO's Return On Assets of 10.60% is amongst the best of the industry. KO outperforms 84.38% of its industry peers.
With an excellent Return On Equity value of 41.16%, KO belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
With a decent Return On Invested Capital value of 11.60%, KO is doing good in the industry, outperforming 62.50% of the companies in the same industry.
KO had an Average Return On Invested Capital over the past 3 years of 12.93%. This is in line with the industry average of 11.61%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.6% | ||
| ROE | 41.16% | ||
| ROIC | 11.6% |
ROA(3y)10.61%
ROA(5y)10.21%
ROE(3y)41.22%
ROE(5y)41.26%
ROIC(3y)12.93%
ROIC(5y)12.26%
1.3 Margins
KO's Profit Margin of 23.00% is amongst the best of the industry. KO outperforms 100.00% of its industry peers.
KO's Profit Margin has been stable in the last couple of years.
KO's Operating Margin of 25.13% is amongst the best of the industry. KO outperforms 81.25% of its industry peers.
KO's Operating Margin has declined in the last couple of years.
KO's Gross Margin of 61.07% is amongst the best of the industry. KO outperforms 93.75% of its industry peers.
KO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.13% | ||
| PM (TTM) | 23% | ||
| GM | 61.07% |
OM growth 3Y-6.65%
OM growth 5Y-3.56%
PM growth 3Y-3.68%
PM growth 5Y-1.15%
GM growth 3Y0.44%
GM growth 5Y0.1%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so KO is still creating some value.
Compared to 1 year ago, KO has about the same amount of shares outstanding.
Compared to 5 years ago, KO has more shares outstanding
The debt/assets ratio for KO is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.37 indicates that KO is not in any danger for bankruptcy at the moment.
The Altman-Z score of KO (4.37) is better than 78.13% of its industry peers.
KO has a Debt/Equity ratio of 1.87. This is a high value indicating a heavy dependency on external financing.
KO's Debt to Equity ratio of 1.87 is on the low side compared to the rest of the industry. KO is outperformed by 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.87 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 4.37 |
ROIC/WACC1.18
WACC9.84%
2.3 Liquidity
KO has a Current Ratio of 1.10. This is a normal value and indicates that KO is financially healthy and should not expect problems in meeting its short term obligations.
KO's Current ratio of 1.10 is on the low side compared to the rest of the industry. KO is outperformed by 62.50% of its industry peers.
KO has a Quick Ratio of 1.10. This is a bad value and indicates that KO is not financially healthy enough and could expect problems in meeting its short term obligations.
KO has a Quick ratio of 0.89. This is in the better half of the industry: KO outperforms 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.1 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
KO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.86%.
Measured over the past 5 years, KO shows a small growth in Earnings Per Share. The EPS has been growing by 6.42% on average per year.
Looking at the last year, KO shows a small growth in Revenue. The Revenue has grown by 1.77% in the last year.
The Revenue has been growing slightly by 4.78% on average over the past years.
EPS 1Y (TTM)5.86%
EPS 3Y7.32%
EPS 5Y6.42%
EPS Q2Q%1.39%
Revenue 1Y (TTM)1.77%
Revenue growth 3Y6.78%
Revenue growth 5Y4.78%
Sales Q2Q%-0.13%
3.2 Future
The Earnings Per Share is expected to grow by 6.63% on average over the next years.
Based on estimates for the next years, KO will show a small growth in Revenue. The Revenue will grow by 4.91% on average per year.
EPS Next Y6.08%
EPS Next 2Y6.93%
EPS Next 3Y7.06%
EPS Next 5Y6.63%
Revenue Next Year4.21%
Revenue Next 2Y4.76%
Revenue Next 3Y5.06%
Revenue Next 5Y4.91%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
KO is valuated rather expensively with a Price/Earnings ratio of 24.69.
The rest of the industry has a similar Price/Earnings ratio as KO.
Compared to an average S&P500 Price/Earnings ratio of 27.45, KO is valued at the same level.
KO is valuated rather expensively with a Price/Forward Earnings ratio of 21.67.
The rest of the industry has a similar Price/Forward Earnings ratio as KO.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, KO is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.69 | ||
| Fwd PE | 21.67 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as KO.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 25.78 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates KO does not grow enough to justify the current Price/Earnings ratio.
KO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.06
PEG (5Y)3.85
EPS Next 2Y6.93%
EPS Next 3Y7.06%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.94%, KO has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.13, KO pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, KO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.94% |
5.2 History
The dividend of KO has a limited annual growth rate of 3.93%.
KO has paid a dividend for at least 10 years, which is 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)3.93%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
77.42% 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.
DP77.42%
EPS Next 2Y6.93%
EPS Next 3Y7.06%
71.35
+0.44 (+0.62%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners65.16%
Inst Owner Change1.31%
Ins Owners0.57%
Ins Owner Change0.96%
Market Cap307.09B
Analysts81.67
Price Target79.51 (11.44%)
Short Float %0.95%
Short Ratio2.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.94% |
Yearly Dividend1.94
Dividend Growth(5Y)3.93%
DP77.42%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.4%
Min EPS beat(2)-0.7%
Max EPS beat(2)3.5%
EPS beat(4)3
Avg EPS beat(4)1.11%
Min EPS beat(4)-0.7%
Max EPS beat(4)3.5%
EPS beat(8)6
Avg EPS beat(8)1.33%
EPS beat(12)9
Avg EPS beat(12)1.44%
EPS beat(16)13
Avg EPS beat(16)3.57%
Revenue beat(2)1
Avg Revenue beat(2)0.74%
Min Revenue beat(2)-2.22%
Max Revenue beat(2)3.7%
Revenue beat(4)3
Avg Revenue beat(4)0.78%
Min Revenue beat(4)-2.22%
Max Revenue beat(4)3.7%
Revenue beat(8)4
Avg Revenue beat(8)0.21%
Revenue beat(12)6
Avg Revenue beat(12)0.39%
Revenue beat(16)9
Avg Revenue beat(16)1.03%
PT rev (1m)0.56%
PT rev (3m)4.61%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)-1.7%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)0.34%
Revenue NQ rev (1m)0.11%
Revenue NQ rev (3m)-0.18%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)0.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.69 | ||
| Fwd PE | 21.67 | ||
| P/S | 6.55 | ||
| P/FCF | N/A | ||
| P/OCF | 285.67 | ||
| P/B | 11.72 | ||
| P/tB | N/A | ||
| EV/EBITDA | 25.78 |
EPS(TTM)2.89
EY4.05%
EPS(NY)3.29
Fwd EY4.62%
FCF(TTM)-0.22
FCFYN/A
OCF(TTM)0.25
OCFY0.35%
SpS10.89
BVpS6.09
TBVpS-1.29
PEG (NY)4.06
PEG (5Y)3.85
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.6% | ||
| ROE | 41.16% | ||
| ROCE | 15.12% | ||
| ROIC | 11.6% | ||
| ROICexc | 13.89% | ||
| ROICexgc | 25.57% | ||
| OM | 25.13% | ||
| PM (TTM) | 23% | ||
| GM | 61.07% | ||
| FCFM | N/A |
ROA(3y)10.61%
ROA(5y)10.21%
ROE(3y)41.22%
ROE(5y)41.26%
ROIC(3y)12.93%
ROIC(5y)12.26%
ROICexc(3y)15.62%
ROICexc(5y)14.7%
ROICexgc(3y)32.19%
ROICexgc(5y)29.87%
ROCE(3y)16.38%
ROCE(5y)15.53%
ROICexcg growth 3Y-0.66%
ROICexcg growth 5Y2.12%
ROICexc growth 3Y1.18%
ROICexc growth 5Y0.05%
OM growth 3Y-6.65%
OM growth 5Y-3.56%
PM growth 3Y-3.68%
PM growth 5Y-1.15%
GM growth 3Y0.44%
GM growth 5Y0.1%
F-Score5
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.87 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.81 | ||
| Cap/Depr | 185.46% | ||
| Cap/Sales | 4.27% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 8.36% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.1 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z | 4.37 |
F-Score5
WACC9.84%
ROIC/WACC1.18
Cap/Depr(3y)157.99%
Cap/Depr(5y)128.95%
Cap/Sales(3y)3.96%
Cap/Sales(5y)3.8%
Profit Quality(3y)78.5%
Profit Quality(5y)92.52%
High Growth Momentum
Growth
EPS 1Y (TTM)5.86%
EPS 3Y7.32%
EPS 5Y6.42%
EPS Q2Q%1.39%
EPS Next Y6.08%
EPS Next 2Y6.93%
EPS Next 3Y7.06%
EPS Next 5Y6.63%
Revenue 1Y (TTM)1.77%
Revenue growth 3Y6.78%
Revenue growth 5Y4.78%
Sales Q2Q%-0.13%
Revenue Next Year4.21%
Revenue Next 2Y4.76%
Revenue Next 3Y5.06%
Revenue Next 5Y4.91%
EBIT growth 1Y-12.62%
EBIT growth 3Y-0.32%
EBIT growth 5Y1.05%
EBIT Next Year15.75%
EBIT Next 3Y9.88%
EBIT Next 5Y7.57%
FCF growth 1Y-110.3%
FCF growth 3Y-25.04%
FCF growth 5Y-10.85%
OCF growth 1Y-89.82%
OCF growth 3Y-18.62%
OCF growth 5Y-8.26%