Taking a Sip of Coke

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The final stock I’ll be analyzing before making my next stock investment in early February is The Coca-Cola Company (KO). I currently already have a position of KO in my personal portfolio, and it has made little headway outside of dividends since I made my entry. When I consider the history of this stock, I won’t just be talking about the past 2 years I’ve owned it.

The Coca-Cola Company has had an amazing history, with 51 years of dividend increases, it is a Dividend King.

Their dividend distributions have risen over 9% in the past year, and about 9.3% per year for the past 10 years on average. Right now, entry yield is 3.01% and they’re just about due for another dividend raise in the middle of February.

The current EPS is $1.93 putting the PE ratio at 19.26 which is just below my threshold of 20. I think this stock is set to take off over the next year, making now the ideal time to buy.

KO’s payout ratio is currently 53.6% which gives them space to increase distributions and is below my threshold of 65%.

If you invested $1000 in The Coca-Cola Company 10 years ago and reinvested all dividends, you would now have about 71.36 shares worth $2654.59 paying out $79.92 dividends each year.

The Coca-Cola Company also has a significant economic moat as the provider of both the #1 and #2 top soft drinks. Source

This concludes my analysis of stocks for this next purchase. Today Target fell into the $55 range, and it did so a little sooner than I thought it would, so I intend to stand by until after whatever damages result from their quarterly earnings report. Right now, KO is my favorite, so I’ll probably be purchasing 25 shares of KO. MSFT is my second favorite right now, so if I can swing it, I’d like to buy 13 shares of MSFT as well.

Comments

I like the purchase, I just made the same purchase myself. Have a Coke and a smile!

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Kevin said:

Thanks Captain Dividend. Coke is valued really well right now, so it seemed like a great opportunity. I’m also a fierce Diet Coke addict, so it’s fun to think of my caffeinated beverage being a reinvestment.

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