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Coca-Cola operates a tremendously strong business model. This is evident in their dividend history. Click here to download your free detailed Dividend Kings Excel Spreadsheet so you can see other businesses with strong and durable competitive advantages like Coca-Cola. This level of dividend growth would not exist unless the company operated a recession resistant business model with distinct competitive advantages and Pengertian dan Arti Leverage Forex wide economic moat.

Soda sales have dropped for 11 straight years. In fact, the company still has plenty of room to grow. The year was Robinson is also credited with creating the famous cursive Coca-Cola logo, which is still in use today. Source: The History of Coca-Cola Fast forward to today, and Coca-Cola is a true giant in the beverage industry. With more than years of serving customers, the company has scaled up to an impressive size. Almost 22, Coca-Cola beverages are consumed every second. Many people are surprised to learn that many of their favorite drinks are owned by the Coca-Cola company, even if they do not explicitly bear the Coca-Cola name.

This diverse product portfolio creates significant operational diversification, and insulates the company from any downturns in interest for any single one of their product. Still drinks non-carbonated beverages such as water, juices, warren buffett coca cola put options before 9 11 teas have been very popular in recent years because of growing concerns surrounding the health effects of sparkling products often sugary sodas.

The company has generated significant free cash flow that has been returned to investors in a very shareholder-friendly manner. A breakdown is shown in the following slide. Fundamentally, Coca-Cola has done a fantastic job at improving metrics that are commonly associated with business success. However, due to a series of stock splits, each shareholder of Coca-Cola stock in would effectively own 48 shares today.

Doing the math, Coca-Cola has compounded EPS at a CAGR of The factors are: With a declining industry backdrop, it might be difficult to identify organic growth prospects for Coca-Cola. However, they certainly exist, and are two-pronged in nature. This is especially true for their sparkling products, but I have no doubt that the company can use their industry expertise to drive growth in stills. Of particular concern to Coca-Cola is the transition of consumers due to the dietary concerns surrounding sugary sodas.

Coca-Cola will also benefit from having a smaller market share in stills versus sparkling. Because of their lower market share in this category, the company can expect each dollar of advertising for stills products to yield a higher return than advertising money spent on sparkling products. Rather than exploring all options, consumers will often seek out what is familiar, at least for a small purchase like a bottle of Coca-Cola.

Because of this stickiness, it is reasonable to assume that Coca-Cola can maintain a relatively stable market share going forward. In recent years, the worldwide beverage market has grown at a rate slightly above 3. Source: Statistica If these levels of growth continue, then even if Coca-Cola simply maintains current market share their revenues will grow at the same pace 3.

This is good for a CAGR of market capitalization of Investor returns would be even warren buffett coca cola put options before 9 11 than this number because of share buybacks and dividend payments. Further, it is important to make conservative estimations when evaluating investments. The company has a clear set of strategic actions to move the needle on shareholder returns. While that management decision certainly increased the operational size of Coca-Cola, it did not necessarily drive shareholder returns.

The net effect of this new transition is to make Coca-Cola a smaller yet more profitable business. After the divestiture of bottling assets, the company will focus on their core business: the production of syrups and concentrate. The size of this transformation for Coca-Cola cannot be understated. This has been negatively received by some investors. However, this will be offset by higher gross margins and increased net income for the company. In December, it was announced that Muhtar Kent was stepping down as the CEO of Coca-Cola, effective May 1, All things considered, this organizational change should leave Coca-Cola well-positioned to focus on their core business, resulting in improved company results.

This is prudent because international countries are expected to take more and more of the global beverage market share over the next few years. By focusing on the fastest-growing markets, Coca-Cola should drive sales, improving investor returns. The following diagram outlines the forecasted market share by geography for the beverage market in Though the company has only reported the first three quarter so far, fiscal is off to a much better start than Source: Coca-Cola Third Quarter Earnings Presentationslide 16 While outlook remains generally unchanged except with regard to capital expenditures, there is one item of note for the Coca-Cola investor.

However, this will not be an ongoing trend. The US dollar is trading at elevated levels right now. Updated January 14th, by The Financial Canadian. Coca-Cola KO is the gold standard in the beverage industry. The company is the largest seller of non-alcoholic beverages in the world. See Our Best ideas.




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