Coca Cola's primary competitor is Pepsico Inc. (PEP). Pepsico is currently trading around $62 with a market cap of 98.2 billion and a price to earnings ratio of 15.78. Pepsico pays a dividend which yields 3.3% versus Coca Cola's dividend yield of 2.6%.
Coca Cola has done a fantastic job of growing earnings. In 2010, the company increased net income by 73% from 2009. In the second quarter of 2011, the company increased net income by 18% over the second quarter of 2010. Coca Cola has paid quarterly dividends for many years. Over the last 5 years, the company has increased its dividend by 51.6%.
The stock price has reflected Coca Cola’s growing earnings and dividend. The stock price is up by 22.87% over the last 52 weeks and 48.55% over the last 3 years. Coca Cola has been one of investment guru Warren Buffett’s favorite stocks. I agree with Mr. Buffett and rate Coca Cola as a buy. source seekingalpha.com
Coca Cola (KO) Dividend Growth forecast
The Coca Cola Company has increased their dividend for 49 consecutive years. This puts them near the top of the historical dividend growth list. The stock currently yields approximately 2.90%, and they’ve raised their dividend by 6.8% this year. The payout ratio is between 50% and 60%, which is an optimal payout ratio for a company like this, in my opinion.
| Year | Dividend | Yield |
|---|---|---|
| 2011 | $1.88* | 2.90% |
| 2010 | $1.76 | 3.00% |
| 2009 | $1.64 | $3.28% |
| 2008 | $1.52 | 3.04% |
| 2007 | $1.36 | 2.50% |
| 2006 | $1.24 | 2.80% |
Coke has grown stock dividends by nearly 9% compounded annually over the past five years. The most recent increase, from 2010 to 2011 was a bit under 7% (*and numbers in the above table for 2011 are extrapolated to assume this quarterly dividend will be paid all year, as per usual).
The company has also been repurchasing shares annually. The company had net share repurchases of over $1 billion this past year. Because their stock is never at a low valuation, I’d prefer the company to keep share repurchases at a fairly low/moderate level. source dividendmonk.com For the latest updates PRESS CTR + D or visit Stock Market news Today
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