is ko dividend safe

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Only between late 2007’s and late 2008’s has KO been even close to a PE of 16 in the last 20 years since 1996. However, with slowing growth due to consumers moving away from their core products as a result of the healthy living trend, should investors continue to count on Coca-Cola to deliver higher dividends for them over the next 54 years? Copyright Notice | The company has grown its dividend for the last 57 consecutive years and is increasing its dividend by an average of 3.48% each year. (function() { Coca-Cola Co (Symbol: KO) has been named to the Dividend Channel ''S.A.F.E. Official Company Update on CORONAVIRUS click here. While raw material costs grow in proportion with sales, advertising and SG&A are costs that can be leveraged. Coca-Cola (NYSE:KO) has given its customers thirst-quenching beverages for more than a century now, with its namesake cola paving the way toward creating a much larger empire that now includes bottled water, juices, sports drinks, and other drink products. Brand strength is reinforced by KO’s advertising spending ($4 billion in FY15 and up 14% Year-Over-Year) and global distribution reach, especially in emerging markets (81% of KO’s volume is outside of the US – Mexico, China, Brazil, and Japan are next four largest markets) that will become increasingly important growth drivers going forward. They can do this through different packaging sizes, bottle types, and ingredients. The main costs in the business are raw materials (sweeteners, metals, juices, PET), advertising, and SG&A. That doesn't mean that Coca-Cola's dividend is doomed, but it does suggest that investors should watch closely to make sure that the fundamental business underpinnings that have allowed Coca-Cola to boost its dividend payments for so long don't change so much that shareholders are left holding the bag. KO's dividend yield, history, payout ratio, proprietary DARS™ rating & much more! American Electric Power is … Furthermore, the less investment opportunities the company has, the more cash the company should payout to its shareholders. Why Coca-Cola is … Terms of Service | Source: Yahoo! Really comprehensive article in a format that I as a non accountant can understand– thank you as always. Dividend cuts are being announced left and right as Covid-19 has ravaged the global economy. In order to compete effectively, Coca-Cola will have to tap into more popular beverage segments like bottled water, energy drinks, and sports drinks, and the drink-maker's strategic vision is consistent with that overall game plan. Dividend.com: The #1 Source For Dividend Investing. Today, it is the world’s largest non-alcoholic beverage company. It’s clear the company’s brands are crown jewel assets; however, less obvious is Coca Cola’s distribution platform. The drop in FY11 was driven by KO’s acquisition of some of its bottlers, which have lower margins and greater capital intensity. Coca-Cola was founded in 1892. Dan Caplinger has been a contract writer for the Motley Fool since 2006. By looking at Coca-Cola's fundamental business prospects, you can see whether it's smart to rely on its dividend being safe in the future. Our Growth Score answers the question, “How fast is the dividend likely to grow?” It considers many of the same fundamental factors as the Safety Score but places more weight on growth-centric metrics like sales and earnings growth and payout ratios. Coca-Cola should remain a safe, defensive dividend stock, but the firm's need to invest in new beverages seems likely to result in slower dividend growth compared to the past. Disclaimer | 25'' … While it is well known that Americans are consuming less and less soda per capita, these drivers should be able to allow Coke to continue to grow the top line in excess of inflation year over the coming years. Adjusting for currencies (over 50% of Coke’s sales are international), Coca-Cola has grown revenue more-or-less in line with global GDP growth over the last three years. The Coca-Cola Co (KO): A Safe Dividend King Trading At Its 52-Week Low Published on November 24, 2016 at 5:41 pm by Simply Safe Dividends in Dividend Stocks , News , Stock Analysis Coca-Cola has managed to grow its dividend for decades, but some will argue that the beverage leader hasn't faced this kind of existential threat before. Unlike companies with extremely high yields that later prove to have been too ambitious for their long-term prospects, Coca-Cola has taken a more measured approach toward its dividend, and that has kept payouts from becoming dangerous. Dividend yield: 3.6%; Consecutive dividends since: 1920; Coca-Cola (KO, $45.89) is the newest addition to this club of long-paying dividend stocks, boasting 100 years of … Stock Advisor launched in February of 2002. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. There are typically 4 dividends per year (excluding specials), and the dividend cover is approximately 1.9. Of course, if everything is going perfect with Coca-Cola, shares would be soaring. } When one considers the growth drivers and business model, Coke should be counted on for future dividend growth in excess of inflation or around 4-6% per year. Overall, these three key growth drivers should allow Coca-Cola to offset any weakness induced by flat to declining case volumes in North America and grow revenue in-line to even in excess of global GDP. By comparison, Coca-Cola's biggest competitor in the beverage space has a payout ratio of around 65%, which is a good number for a mature company with a solid business that doesn't require a lot of capital investment to sustain. Living off dividends in retirement is a dream shared by many but achieved by few. 25'' list, signifying a stock with above-average ''DividendRank''. Coca-Cola's ongoing commitment to dividend growth creates an added level of safety that's attractive to investors. Contact Us, COPYRIGHT © 2017 Simply Safe Dividends LLC. Coca-Cola sports a dividend yield of more than 3%, which looks quite attractive compared to the broader market's average of about a 2% yield. Growing per capita consumption in these enormous markets will allow global per capita consumption of Coca-Cola to rise for a long time to come. Dividend Summary. @themotleyfool #stocks $KO, dubious about Coca-Cola's ability to keep growing, plunged to levels not seen since the 1980s, Coca-Cola has also moved to divest its bottling operations, 5 Reasons to Invest in Dividend-Paying Stocks for Retirement, The 3 Best Warren Buffett Dividend Stocks to Buy Right Now, Copyright, Trademark and Patent Information. We analyze 25+ years of dividend data and 10+ years of fundamental data to understand the safety and growth prospects of a company’s dividend. , albeit a narrow one by doing so, Coca-Cola 's current payout ratio, and are! Largely a function of business model stability and Investment opportunities has been named to the dividend is... Accountant can understand– thank you as always well into the future should look elsewhere for opportunities solid momentum! Stream for retirement with our online portfolio tools ratio is 78 % and its free cash flow payout ratio in-line... 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