Money and Finance
The Coca-Cola Company (KO) will be announcing earnings on Tuesday, so what better time than the present to get an update on its current valuation. There's not much needed to be said about a company as great as Coca-Cola. It has the number 1 and number 2 brands in terms of sales in Coca-Cola Classic and Diet Coke as well as a huge stable of other recognizable brands in Sprite, Powerade, Vitaminwater, Minute Maid and many more. The Coca-Cola Company closed trading on Friday, February 14th at $38.93 giving a current yield of 2.88%.
DFC Valuation:
Analysts followed by Yahoo! Finance expect The Coca-Cola Company to grow earnings 5.55% per year for the next five years and I've assumed they can grow at 4.5% per year thereafter. Running these numbers through a two-stage DCF analysis with a 9% discount rate yields a fair value price of $44.65. This means the shares are trading at a 12.8% discount to the discounted cash flow analysis.
Graham Number:
The Graham Number valuation method was conceived of by Benjamin Graham, the father of value investing, and calculates the maximum price one should pay for a company given the earnings and book value. The Coca-Cola Company earned $1.93 per share in the last twelve months and has a current book value per share of $7.28. The Graham Number is calculated to be $17.78, suggesting that it is overvalued by 119.0%.
Click here to the read the rest of the analysis at Seeking Alpha.
I've updated my Stock Analysis page to reflect the most recent analysis.
- Does The Coca-cola Company Still Have The Recipe For Out-sized Returns?
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There's several companies that I would like to own much larger stakes of. One of these companies is Coca-Cola (KO). They are a dividend champion with 50 consecutive years of dividend growth. That's quite a feat. However, given Coca-Cola's...
- Coca-cola Stock Analysis
I can't believe I hadn't posted this before because Coca-Cola (KO) is one of my core holdings that I wish I could add more to and I really enjoy their product. Coca-Cola closed trading on Friday, November 23rd at $37.93. Company Background:...
Money and Finance
The Long Case for the Coca-Cola Company
The Coca-Cola Company (KO) will be announcing earnings on Tuesday, so what better time than the present to get an update on its current valuation. There's not much needed to be said about a company as great as Coca-Cola. It has the number 1 and number 2 brands in terms of sales in Coca-Cola Classic and Diet Coke as well as a huge stable of other recognizable brands in Sprite, Powerade, Vitaminwater, Minute Maid and many more. The Coca-Cola Company closed trading on Friday, February 14th at $38.93 giving a current yield of 2.88%.
DFC Valuation:
Analysts followed by Yahoo! Finance expect The Coca-Cola Company to grow earnings 5.55% per year for the next five years and I've assumed they can grow at 4.5% per year thereafter. Running these numbers through a two-stage DCF analysis with a 9% discount rate yields a fair value price of $44.65. This means the shares are trading at a 12.8% discount to the discounted cash flow analysis.
Graham Number:
The Graham Number valuation method was conceived of by Benjamin Graham, the father of value investing, and calculates the maximum price one should pay for a company given the earnings and book value. The Coca-Cola Company earned $1.93 per share in the last twelve months and has a current book value per share of $7.28. The Graham Number is calculated to be $17.78, suggesting that it is overvalued by 119.0%.
Click here to the read the rest of the analysis at Seeking Alpha.
I've updated my Stock Analysis page to reflect the most recent analysis.
- Does The Coca-cola Company Still Have The Recipe For Out-sized Returns?
There's no mistake that one of the greatest wealth creators of the last century is The Coca-Cola Company (NYSE:KO). With 20 different beverage brands generating over a billion dollars in annual revenues they are the envy of plenty of companies. Especially...
- Is There Value In Dr. Pepper Snapple Group Inc.?
Earnings season is in full swing and with each new release comes some more data points on both past and future results. On February 12th management at Dr. Pepper Snapple Group, Inc. (DPS) announced 4Q 2013 and full year results. Last week...
- Valuation Of Pepsico Inc. - The Long Case Looks Strong
Last week management of PepsiCo. Inc. (PEP) announced earnings for 4Q and full year 2013. The results were fairly mixed with revenue increasing around 1% over 2012. North American soda consumption continues to be a drag on the growth of the...
- How Important Is Valuation?
There's several companies that I would like to own much larger stakes of. One of these companies is Coca-Cola (KO). They are a dividend champion with 50 consecutive years of dividend growth. That's quite a feat. However, given Coca-Cola's...
- Coca-cola Stock Analysis
I can't believe I hadn't posted this before because Coca-Cola (KO) is one of my core holdings that I wish I could add more to and I really enjoy their product. Coca-Cola closed trading on Friday, November 23rd at $37.93. Company Background:...