COCA-COLA CO/THE (KO) Stock Fundamental Analysis
NYSE:KO - New York Stock Exchange, Inc. - US1912161007 - Common Stock - Currency: USD
Taking everything into account, KO scores 4 out of 10 in our fundamental rating. KO was compared to 32 industry peers in the Beverages industry. KO has an excellent profitability rating, but there are 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
In the past year KO was profitable.
KO had a positive operating cash flow in the past year.
KO had positive earnings in each of the past 5 years.
Each year in the past 5 years KO had a positive operating cash flow.
1.2 Ratios
The Return On Assets of KO (10.57%) is better than 81.25% of its industry peers.
KO's Return On Equity of 42.77% is amongst the best of the industry. KO outperforms 90.63% of its industry peers.
KO's Return On Invested Capital of 12.61% is fine compared to the rest of the industry. KO outperforms 68.75% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for KO is in line with the industry average of 12.12%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.57% | ||
| ROE | 42.77% | ||
| ROIC | 12.61% |
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
The Profit Margin of KO (22.59%) is better than 93.75% of its industry peers.
In the last couple of years the Profit Margin of KO has remained more or less at the same level.
KO's Operating Margin of 25.09% is fine compared to the rest of the industry. KO outperforms 78.13% of its industry peers.
In the last couple of years the Operating Margin of KO has declined.
KO has a Gross Margin of 61.06%. This is amongst the best in the industry. KO outperforms 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 Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.09% | ||
| PM (TTM) | 22.59% | ||
| GM | 61.06% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), KO is creating some value.
Compared to 1 year ago, KO has about the same amount of shares outstanding.
KO has more shares outstanding than it did 5 years ago.
KO has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.41 indicates that KO is not in any danger for bankruptcy at the moment.
The Altman-Z score of KO (4.41) is better than 68.75% of its industry peers.
The Debt to FCF ratio of KO is 9.39, which is on the high side as it means it would take KO, 9.39 years of fcf income to pay off all of its debts.
KO has a Debt to FCF ratio (9.39) which is comparable to the rest of the industry.
KO has a Debt/Equity ratio of 1.77. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.77, KO is doing worse than 71.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.77 | ||
| Debt/FCF | 9.39 | ||
| Altman-Z | 4.41 |
ROIC/WACC1.52
WACC8.28%
2.3 Liquidity
KO has a Current Ratio of 1.03. 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 1.03 is in line compared to the rest of the industry. KO outperforms 40.63% of its industry peers.
A Quick Ratio of 0.84 indicates that KO may have some problems paying its short term obligations.
KO's Quick ratio of 0.84 is in line compared to the rest of the industry. KO outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
KO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.06%.
KO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.42% yearly.
The Revenue has been growing slightly by 2.86% in the past year.
Measured over the past years, KO shows a small growth in Revenue. The Revenue has been growing by 4.78% on average per year.
EPS 1Y (TTM)7.06%
EPS 3Y7.32%
EPS 5Y6.42%
EPS Q2Q%12.24%
Revenue 1Y (TTM)2.86%
Revenue growth 3Y6.78%
Revenue growth 5Y4.78%
Sales Q2Q%4.17%
3.2 Future
The Earnings Per Share is expected to grow by 6.66% on average over the next years.
KO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.76% yearly.
EPS Next Y5.75%
EPS Next 2Y6.78%
EPS Next 3Y7.02%
EPS Next 5Y6.66%
Revenue Next Year3.9%
Revenue Next 2Y4.52%
Revenue Next 3Y4.9%
Revenue Next 5Y4.76%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
The Price/Earnings ratio is 25.35, which means the current valuation is very expensive for KO.
KO's Price/Earnings ratio is in line with the industry average.
KO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 23.97 indicates a rather expensive valuation of KO.
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 (21.08), we can say KO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.35 | ||
| Fwd PE | 23.97 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KO indicates a slightly more expensive valuation: KO is more expensive than 62.50% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as KO.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 66.26 | ||
| EV/EBITDA | 26.31 |
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 a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.41
PEG (5Y)3.95
EPS Next 2Y6.78%
EPS Next 3Y7.02%
5. Dividend
5.1 Amount
KO has a Yearly Dividend Yield of 2.79%. Purely for dividend investing, there may be better candidates out there.
KO's Dividend Yield is a higher than the industry average which is at 3.02.
KO's Dividend Yield is comparable with the S&P500 average which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
5.2 History
The dividend of KO has a limited annual growth rate of 3.93%.
KO has been paying a dividend for at least 10 years, so it has a reliable track record.
KO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.93%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
78.63% 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.
DP78.63%
EPS Next 2Y6.78%
EPS Next 3Y7.02%
73
+1.32 (+1.84%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners64.53%
Inst Owner Change0.34%
Ins Owners0.57%
Ins Owner Change1%
Market Cap314.16B
Analysts80.56
Price Target76.46 (4.74%)
Short Float %0.98%
Short Ratio2.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
Yearly Dividend1.94
Dividend Growth(5Y)3.93%
DP78.63%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.96%
Min EPS beat(2)0.43%
Max EPS beat(2)3.5%
EPS beat(4)4
Avg EPS beat(4)1.36%
Min EPS beat(4)0.28%
Max EPS beat(4)3.5%
EPS beat(8)7
Avg EPS beat(8)1.71%
EPS beat(12)10
Avg EPS beat(12)2.1%
EPS beat(16)14
Avg EPS beat(16)3.98%
Revenue beat(2)2
Avg Revenue beat(2)1.86%
Min Revenue beat(2)0.03%
Max Revenue beat(2)3.7%
Revenue beat(4)3
Avg Revenue beat(4)1.1%
Min Revenue beat(4)-0.97%
Max Revenue beat(4)3.7%
Revenue beat(8)4
Avg Revenue beat(8)0.33%
Revenue beat(12)7
Avg Revenue beat(12)0.88%
Revenue beat(16)10
Avg Revenue beat(16)1.26%
PT rev (1m)0.59%
PT rev (3m)1.52%
EPS NQ rev (1m)-0.82%
EPS NQ rev (3m)-3.02%
EPS NY rev (1m)0.03%
EPS NY rev (3m)-0.49%
Revenue NQ rev (1m)-0.58%
Revenue NQ rev (3m)-2.6%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.35 | ||
| Fwd PE | 23.97 | ||
| P/S | 6.68 | ||
| P/FCF | 66.26 | ||
| P/OCF | 46.17 | ||
| P/B | 12.64 | ||
| P/tB | N/A | ||
| EV/EBITDA | 26.31 |
EPS(TTM)2.88
EY3.95%
EPS(NY)3.05
Fwd EY4.17%
FCF(TTM)1.1
FCFY1.51%
OCF(TTM)1.58
OCFY2.17%
SpS10.94
BVpS5.78
TBVpS-1.53
PEG (NY)4.41
PEG (5Y)3.95
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.57% | ||
| ROE | 42.77% | ||
| ROCE | 15.68% | ||
| ROIC | 12.61% | ||
| ROICexc | 15.56% | ||
| ROICexgc | 31.45% | ||
| OM | 25.09% | ||
| PM (TTM) | 22.59% | ||
| GM | 61.06% | ||
| FCFM | 10.07% |
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-Score4
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.77 | ||
| Debt/FCF | 9.39 | ||
| Debt/EBITDA | 3.41 | ||
| Cap/Depr | 192% | ||
| Cap/Sales | 4.39% | ||
| Interest Coverage | 7.07 | ||
| Cash Conversion | 52.83% | ||
| Profit Quality | 44.6% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 4.41 |
F-Score4
WACC8.28%
ROIC/WACC1.52
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)7.06%
EPS 3Y7.32%
EPS 5Y6.42%
EPS Q2Q%12.24%
EPS Next Y5.75%
EPS Next 2Y6.78%
EPS Next 3Y7.02%
EPS Next 5Y6.66%
Revenue 1Y (TTM)2.86%
Revenue growth 3Y6.78%
Revenue growth 5Y4.78%
Sales Q2Q%4.17%
Revenue Next Year3.9%
Revenue Next 2Y4.52%
Revenue Next 3Y4.9%
Revenue Next 5Y4.76%
EBIT growth 1Y-10.87%
EBIT growth 3Y-0.32%
EBIT growth 5Y1.05%
EBIT Next Year15.34%
EBIT Next 3Y9.67%
EBIT Next 5Y6.76%
FCF growth 1Y-51.36%
FCF growth 3Y-25.04%
FCF growth 5Y-10.85%
OCF growth 1Y-41.33%
OCF growth 3Y-18.62%
OCF growth 5Y-8.26%