Coca Cola Co (NYSE: KO)

Sector: Consumer Defensive Industry: Beverages - Non-Alcoholic CIK: 0000021344
Market Cap 359.59 Bn
P/B 11.14
P/E 41.22
P/S 7.57
ROIC (Qtr) 16.45
Div Yield % 1.87
Rev 1y % (Qtr) 5.07
Total Debt (Qtr) 47.42 Bn
Debt/Equity (Qtr) 1.52
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About

The Coca-Cola Company, or KO, is a multinational beverage corporation that operates in over 200 countries and territories worldwide. With a rich history dating back to 1886, the company has established itself as one of the largest beverage companies globally, offering a diverse portfolio of brands and products. Coca-Cola's main business activities involve the production, distribution, and sale of beverages, including sparkling soft drinks, water, sports, coffee, and tea, as well as juice, value-added dairy, and plant-based beverages. Its primary...

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Investment thesis

Bull case

  • Healthy cash reserves of 13.87B provide 3.27x coverage of short-term debt 4.24B, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 7.60B provides exceptional 2534.33x coverage of minority interest expenses 3M, showing strong core operations.
  • Operating cash flow of 7.60B provides strong 26.87x coverage of stock compensation 283M, indicating sustainable incentive practices.
  • Robust free cash flow of 5.60B exceeds capital expenditure of 2B by 2.79x, indicating strong organic growth funding capability.
  • Retained earnings of 80.31B provide full 1.86x coverage of long-term debt 43.18B, indicating strong internal capital position.

Bear case

  • Operating cash flow of 7.60B provides thin coverage of dividend payments of (8.48B) with a -0.90 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Long-term investments of 20.32B represent a high 1.86x of fixed assets 10.90B, indicating potential overexposure to financial assets versus operational capabilities.
  • Free cash flow of 5.60B represents just -35.66x of debt issuance (157M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 80.31B provide limited buffer against comprehensive income items of (14.95B), which is -5.37x, indicating elevated exposure to market risks.
  • Tax assets of 1.27B provide limited offset against tax liabilities of 3B, which is 0.42x, indicating potential future cash flow pressure from tax obligations.

Product and Service Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Beverages - Non-Alcoholic
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 KO Coca Cola Co 359.59 Bn 41.22 7.57 47.42 Bn
2 PEP Pepsico Inc 221.63 Bn 26.90 2.36 49.18 Bn
3 MNST Monster Beverage Corp 80.88 Bn 46.84 10.14 0.11 Bn
4 CCEP COCA-COLA EUROPACIFIC PARTNERS plc 48.53 Bn 20.84 1.97 12.58 Bn
5 COKE Coca-Cola Consolidated, Inc. 15.28 Bn 534.08 9.79 1.92 Bn
6 CELH Celsius Holdings, Inc. 10.33 Bn 399.18 4.86 0.86 Bn
7 KDP Keurig Dr Pepper Inc. 5.72 Bn 8.07 0.94 15.85 Bn
8 FIZZ National Beverage Corp 3.42 Bn 18.34 2.85 0.07 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.56 3.00
EV to Cash from Ops. EV/CFO 37.72 25.34
EV to Debt EV to Debt 7.96 82.79
EV to EBIT EV/EBIT 31.88 35.67
EV to EBITDA EV/EBITDA 30.29 24.62
EV to Free Cash Flow [EV/FCF] EV/FCF 53.28 40.15
EV to Market Cap EV to Market Cap 1.05 2.70
EV to Revenue EV/Rev 7.95 3.95
Price to Book Value [P/B] P/B 11.14 15.38
Price to Earnings [P/E] P/E 41.22 112.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.54 -230.19
Dividend Payout Ratio % Div Payout % (Qtr) 66.50 -1.98
Dividend per Basic Share Div per Share (Qtr) 2.02 0.88
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 154.88 30.31
Interest Coverage Int. cover (Qtr) 10.58 3.00
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 2.24 -59.79
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -15.28 125.83
Dividend Growth (1y) % Div 1y % (Qtr) 5.22 -6.02
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 22.52 -5.50
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 47.94 4.45
EBIT Growth (1y) % EBIT 1y % (Qtr) 21.59 70.95
EBT Growth (1y) % EBT 1y % (Qtr) 24.24 3.85
EPS Growth (1y) % EPS 1y % (Qtr) 25.21 5.85
FCF Growth (1y) % FCF 1y % (Qtr) 61.19 19.77
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.84 12.14
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.45 1.15
Cash Payout Ratio Cash Payout (Qtr) 0.88 0.16
Cash Ratio Cash Ratio (Qtr) 0.62 0.76
Current Ratio Curr Ratio (Qtr) 1.21 1.78
Debt to Equity Ratio Debt/Equity (Qtr) 1.52 1.22
Interest Cover Ratio Int Coverage (Qtr) 10.58 3.00
Times Interest Earned Times Interest Earned (Qtr) 10.58 3.00
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 39.00 9.71
EBIT Margin % EBIT Margin % (Qtr) 36.70 6.85
EBT Margin % EBT Margin % (Qtr) 33.23 5.02
Gross Margin % Gross Margin % (Qtr) 61.60 40.60
Net Profit Margin % Net Margin % (Qtr) 27.30 2.49