COCA-COLA CO/THE (KO) Stock Fundamental Analysis
NYSE:KO - New York Stock Exchange, Inc. - US1912161007 - Common Stock
We assign a fundamental rating of 5 out of 10 to KO. KO was compared to 31 industry peers in the Beverages industry. KO scores excellent on profitability, but there are concerns on its financial health. While showing a medium growth rate, KO is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
KO had positive earnings in the past year.
In the past year KO had a positive cash flow from operations.
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 9.80%, KO is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
KO has a better Return On Equity (39.25%) than 89.29% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.08%, KO is in the better half of the industry, outperforming 78.57% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for KO is in line with the industry average of 13.61%.
The last Return On Invested Capital (14.08%) for KO is above the 3 year average (12.96%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.8% | ||
| ROE | 39.25% | ||
| ROIC | 14.08% |
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
Looking at the Profit Margin, with a value of 22.45%, KO belongs to the top of the industry, outperforming 92.86% of the companies in the same industry.
In the last couple of years the Profit Margin of KO has grown nicely.
With an excellent Operating Margin value of 29.50%, KO belongs to the best of the industry, outperforming 96.43% of the companies in the same industry.
In the last couple of years the Operating Margin of KO has remained more or less at the same level.
KO has a Gross Margin of 60.43%. This is amongst the best in the industry. KO outperforms 96.43% 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 | 29.5% | ||
| PM (TTM) | 22.45% | ||
| GM | 60.43% |
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%
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.
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.
Compared to 1 year ago, KO has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.90 indicates that KO is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.90, KO is doing good in the industry, outperforming 64.29% of the companies in the same industry.
KO has a debt to FCF ratio of 13.56. This is a negative value and a sign of low solvency as KO would need 13.56 years to pay back of all of its debts.
KO has a Debt to FCF ratio of 13.56. This is in the lower half of the industry: KO underperforms 60.71% of its industry peers.
KO has a Debt/Equity ratio of 1.70. This is a high value indicating a heavy dependency on external financing.
KO's Debt to Equity ratio of 1.70 is on the low side compared to the rest of the industry. KO is outperformed by 78.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | 13.56 | ||
| Altman-Z | 3.9 |
ROIC/WACC1.67
WACC8.41%
2.3 Liquidity
KO has a Current Ratio of 1.06. This is a normal value and indicates that KO is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.06, KO is doing worse than 64.29% of the companies in the same industry.
A Quick Ratio of 0.90 indicates that KO may have some problems paying its short term obligations.
KO has a Quick ratio (0.90) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
KO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.42%.
The Earnings Per Share has been growing slightly by 5.18% on average over the past years.
Looking at the last year, KO shows a small growth in Revenue. The Revenue has grown by 2.97% in the last year.
Measured over the past years, KO shows a small growth in Revenue. The Revenue has been growing by 5.93% on average per year.
EPS 1Y (TTM)6.42%
EPS 3Y11.32%
EPS 5Y5.18%
EPS Q2Q%4.05%
Revenue 1Y (TTM)2.97%
Revenue growth 3Y11.49%
Revenue growth 5Y5.93%
Sales Q2Q%0.32%
3.2 Future
KO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.01% yearly.
Based on estimates for the next years, KO will show a small growth in Revenue. The Revenue will grow by 3.74% on average per year.
EPS Next Y9.24%
EPS Next 2Y6.67%
EPS Next 3Y6.96%
EPS Next 5Y7.01%
Revenue Next Year1.59%
Revenue Next 2Y2.63%
Revenue Next 3Y3.52%
Revenue Next 5Y3.74%
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 accelerating.
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
With a Price/Earnings ratio of 21.95, KO is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of KO is on the same level as its industry peers.
KO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.29.
A Price/Forward Earnings ratio of 20.22 indicates a rather expensive valuation of KO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KO is on the same level as its industry peers.
KO is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.95 | ||
| Fwd PE | 20.22 |
4.2 Price Multiples
KO's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. KO is more expensive than 64.29% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KO indicates a slightly more expensive valuation: KO is more expensive than 64.29% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 78.15 | ||
| EV/EBITDA | 19.7 |
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 an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.38
PEG (5Y)4.24
EPS Next 2Y6.67%
EPS Next 3Y6.96%
5. Dividend
5.1 Amount
KO has a Yearly Dividend Yield of 3.12%.
KO's Dividend Yield is a higher than the industry average which is at 3.21.
Compared to an average S&P500 Dividend Yield of 2.28, KO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.4%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
78.28% of the earnings are spent on dividend by KO. This is not a sustainable payout ratio.
KO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP78.28%
EPS Next 2Y6.67%
EPS Next 3Y6.96%
COCA-COLA CO/THE
NYSE:KO (1/22/2025, 1:00:08 PM)
61.8999
-0.52 (-0.83%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners63.99%
Inst Owner Change0%
Ins Owners0.57%
Ins Owner Change-0.31%
Market Cap266.65B
Analysts78.24
Price Target75.31 (21.66%)
Short Float %0.85%
Short Ratio1.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
Yearly Dividend1.84
Dividend Growth(5Y)3.4%
DP78.28%
Div Incr Years34
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.83%
Min EPS beat(2)0.43%
Max EPS beat(2)1.23%
EPS beat(4)3
Avg EPS beat(4)-0.15%
Min EPS beat(4)-2.53%
Max EPS beat(4)1.23%
EPS beat(8)6
Avg EPS beat(8)0.96%
EPS beat(12)10
Avg EPS beat(12)2.32%
EPS beat(16)14
Avg EPS beat(16)4.34%
Revenue beat(2)2
Avg Revenue beat(2)0.83%
Min Revenue beat(2)0.03%
Max Revenue beat(2)1.63%
Revenue beat(4)2
Avg Revenue beat(4)0.07%
Min Revenue beat(4)-0.97%
Max Revenue beat(4)1.63%
Revenue beat(8)3
Avg Revenue beat(8)-0.37%
Revenue beat(12)7
Avg Revenue beat(12)0.79%
Revenue beat(16)9
Avg Revenue beat(16)0.83%
PT rev (1m)-0.7%
PT rev (3m)2.66%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.5%
EPS NY rev (1m)0%
EPS NY rev (3m)0.01%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.85%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.95 | ||
| Fwd PE | 20.22 | ||
| P/S | 5.75 | ||
| P/FCF | 78.15 | ||
| P/OCF | 48.27 | ||
| P/B | 10.06 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.7 |
EPS(TTM)2.82
EY4.56%
EPS(NY)3.06
Fwd EY4.94%
FCF(TTM)0.79
FCFY1.28%
OCF(TTM)1.28
OCFY2.07%
SpS10.76
BVpS6.16
TBVpS-1.45
PEG (NY)2.38
PEG (5Y)4.24
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.8% | ||
| ROE | 39.25% | ||
| ROCE | 17.6% | ||
| ROIC | 14.08% | ||
| ROICexc | 18.23% | ||
| ROICexgc | 38.81% | ||
| OM | 29.5% | ||
| PM (TTM) | 22.45% | ||
| GM | 60.43% | ||
| FCFM | 7.36% |
ROA(3y)10.54%
ROA(5y)10.16%
ROE(3y)41.12%
ROE(5y)42.1%
ROIC(3y)12.96%
ROIC(5y)12.39%
ROICexc(3y)15.5%
ROICexc(5y)14.74%
ROICexgc(3y)32.49%
ROICexgc(5y)29.37%
ROCE(3y)16.49%
ROCE(5y)16.13%
ROICexcg growth 3Y14.51%
ROICexcg growth 5Y4.43%
ROICexc growth 3Y9.87%
ROICexc growth 5Y0.72%
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%
F-Score4
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | 13.56 | ||
| Debt/EBITDA | 3.06 | ||
| Cap/Depr | 197.38% | ||
| Cap/Sales | 4.56% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 37.46% | ||
| Profit Quality | 32.78% | ||
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 3.9 |
F-Score4
WACC8.41%
ROIC/WACC1.67
Cap/Depr(3y)125.37%
Cap/Depr(5y)120.64%
Cap/Sales(3y)3.68%
Cap/Sales(5y)4.02%
Profit Quality(3y)102.04%
Profit Quality(5y)102.47%
High Growth Momentum
Growth
EPS 1Y (TTM)6.42%
EPS 3Y11.32%
EPS 5Y5.18%
EPS Q2Q%4.05%
EPS Next Y9.24%
EPS Next 2Y6.67%
EPS Next 3Y6.96%
EPS Next 5Y7.01%
Revenue 1Y (TTM)2.97%
Revenue growth 3Y11.49%
Revenue growth 5Y5.93%
Sales Q2Q%0.32%
Revenue Next Year1.59%
Revenue Next 2Y2.63%
Revenue Next 3Y3.52%
Revenue Next 5Y3.74%
EBIT growth 1Y5.05%
EBIT growth 3Y10.48%
EBIT growth 5Y5.26%
EBIT Next Year16.47%
EBIT Next 3Y9.84%
EBIT Next 5Y8.55%
FCF growth 1Y-66.04%
FCF growth 3Y3.99%
FCF growth 5Y9.9%
OCF growth 1Y-51.81%
OCF growth 3Y5.62%
OCF growth 5Y8.75%