COCA-COLA CO/THE (KO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:KO - US1912161007 - Common Stock
73.315 USD
+0.75 (+1.04%)
We assign a fundamental rating of 5 out of 10 to KO. KO was compared to 32 industry peers in the Beverages industry. KO has an excellent profitability rating, but there are some minor concerns on its financial health. KO has a expensive valuation and it also scores bad on growth. KO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year KO was profitable.
- KO had a positive operating cash flow in the past year.
- In the past 5 years KO has always been profitable.
- In the past 5 years KO always reported a positive cash flow from operatings.
1.2 Ratios
- KO's Return On Assets of 12.29% is amongst the best of the industry. KO outperforms 87.50% of its industry peers.
- KO's Return On Equity of 41.70% is amongst the best of the industry. KO outperforms 96.88% of its industry peers.
- KO has a Return On Invested Capital of 14.17%. This is amongst the best in the industry. KO outperforms 81.25% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for KO is in line with the industry average of 11.62%.
- The last Return On Invested Capital (14.17%) for KO is above the 3 year average (11.98%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.29% | ||
| ROE | 41.7% | ||
| ROIC | 14.17% |
ROA(3y)10.61%
ROA(5y)10.21%
ROE(3y)41.22%
ROE(5y)41.26%
ROIC(3y)11.98%
ROIC(5y)11.6%
1.3 Margins
- KO has a better Profit Margin (27.34%) than 96.88% 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 has a Operating Margin of 31.14%. This is amongst the best in the industry. KO outperforms 96.88% of its industry peers.
- KO's Operating Margin has declined in the last couple of years.
- KO has a Gross Margin of 61.63%. This is amongst the best in the industry. KO outperforms 96.88% of its industry peers.
- KO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.14% | ||
| PM (TTM) | 27.34% | ||
| GM | 61.63% |
OM growth 3Y-5.6%
OM growth 5Y-3.48%
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.
- KO has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, KO has more shares outstanding
- Compared to 1 year ago, KO has a worse debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 4.53 indicates that KO is not in any danger for bankruptcy at the moment.
- KO has a better Altman-Z score (4.53) than 81.25% of its industry peers.
- The Debt to FCF ratio of KO is 8.51, which is on the high side as it means it would take KO, 8.51 years of fcf income to pay off all of its debts.
- With a Debt to FCF ratio value of 8.51, KO perfoms like the industry average, outperforming 46.88% of the companies in the same industry.
- KO has a Debt/Equity ratio of 1.46. This is a high value indicating a heavy dependency on external financing.
- KO has a worse Debt to Equity ratio (1.46) than 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.46 | ||
| Debt/FCF | 8.51 | ||
| Altman-Z | 4.53 |
ROIC/WACC1.73
WACC8.18%
2.3 Liquidity
- KO has a Current Ratio of 1.21. This is a normal value and indicates that KO is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of KO (1.21) is comparable to the rest of the industry.
- KO has a Quick Ratio of 1.21. 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's Quick ratio of 1.00 is fine compared to the rest of the industry. KO outperforms 65.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 1 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 5.32% over the past year.
- 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.
- The Revenue has been growing slightly by 2.80% in the past year.
- The Revenue has been growing slightly by 4.78% on average over the past years.
EPS 1Y (TTM)5.32%
EPS 3Y7.32%
EPS 5Y6.42%
EPS Q2Q%6.49%
Revenue 1Y (TTM)2.8%
Revenue growth 3Y6.78%
Revenue growth 5Y4.78%
Sales Q2Q%3.87%
3.2 Future
- The Earnings Per Share is expected to grow by 7.18% on average over the next years.
- The Revenue is expected to grow by 3.00% on average over the next years.
EPS Next Y6.91%
EPS Next 2Y7.31%
EPS Next 3Y7.38%
EPS Next 5Y7.18%
Revenue Next Year4.47%
Revenue Next 2Y4.79%
Revenue Next 3Y4.61%
Revenue Next 5Y3%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 24.69 indicates a rather expensive valuation of KO.
- KO's Price/Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, KO is valued at the same level.
- KO is valuated rather expensively with a Price/Forward Earnings ratio of 22.11.
- The rest of the industry has a similar Price/Forward Earnings ratio as KO.
- When comparing the Price/Forward Earnings ratio of KO to the average of the S&P500 Index (25.98), we can say KO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.69 | ||
| Fwd PE | 22.11 |
4.2 Price Multiples
- KO's Enterprise Value to EBITDA ratio is in line with the industry average.
- KO's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 56.62 | ||
| EV/EBITDA | 21.24 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of KO may justify a higher PE ratio.
PEG (NY)3.57
PEG (5Y)3.85
EPS Next 2Y7.31%
EPS Next 3Y7.38%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.84%, KO has a reasonable but not impressive dividend return.
- KO's Dividend Yield is a higher than the industry average which is at 1.66.
- KO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
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 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
- KO pays out 65.04% of its income as dividend. This is not a sustainable payout ratio.
- KO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP65.04%
EPS Next 2Y7.31%
EPS Next 3Y7.38%
COCA-COLA CO/THE / KO FAQ
What is the ChartMill fundamental rating of COCA-COLA CO/THE (KO) stock?
ChartMill assigns a fundamental rating of 5 / 10 to KO.
What is the valuation status for KO stock?
ChartMill assigns a valuation rating of 3 / 10 to COCA-COLA CO/THE (KO). This can be considered as Overvalued.
What is the profitability of KO stock?
COCA-COLA CO/THE (KO) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for KO stock?
The Price/Earnings (PE) ratio for COCA-COLA CO/THE (KO) is 24.69 and the Price/Book (PB) ratio is 10.09.
Can you provide the dividend sustainability for KO stock?
The dividend rating of COCA-COLA CO/THE (KO) is 7 / 10 and the dividend payout ratio is 65.04%.