Can Coca-Cola Maintain Its Dividend Growth? – New SeekingAlpha Article

Dividend growth investing as been an immensely popular topic over the last couple years. And almost no other stock is in more dividend growth portfolios than Coca-Cola.

For 55 straight years Coca-Cola has raised its dividend, many are expecting #56 to be announced in a few months.

But the world is changing…is Coca-Cola keeping up?

Here’s my two cents:

 

At a time of low interest rates and an expensive stock market, investors may be tempted to buy into a higher-yielding, “safer” asset like Coca-Cola. But all good things must come to an end, and I fear that Coca-Cola’s day of reckoning is rapidly approaching.

Coke’s Long-Term Decline

Comparing the most recent 3Q 2017 numbers with the 3Q 2012 numbers:

  • Revenue has fallen 22%, from $36.53 billion to $27.90 billion.
  • Net income is down 44%, from $7.15 billion to $4.0 billion.
  • Cash from operations is down 24.5%, from $10.64 billion to $5.92 billion.
  • Free cash flow is down 19%, from $5.9 billion to $4.79 billion.

Meanwhile:

  • Total debt is up 100%, from $16.2 billion to $32.47 billion.

  • Interest expense is up 109%, from $302 million to $631 million.

  • Dividend cost is up 37%, from $4.59 billion to $6.30 billion.

div-vs-fcf

 

 

 

For the rest of the article, check it out on Seeking Alpha, here:

For Investors, Coke Could Be A Real Downer

https://seekingalpha.com/article/4133230-investors-coke-real-downer

 

For related articles here on BeginToInvest:

How Do You Know If A Stock’s Dividend is Sustainable?

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