Price movement

Coca-Cola (KO) has a market cap of $187.8 billion. It fell by 3.3% to close at $43.40 per share on July 27, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -4.6%, -0.87%, and 2.6%, respectively, on the same day. KO is trading 4.3% below its 20-day moving average, 3.4% below its 50-day moving average, and 0.10% below its 200-day moving average.

Coca-Cola Reports Mixed Quarterly Results in 2Q16

Related ETFs and peers

The Schwab US Broad Market ETF (SCHB) invests 0.75% of its holdings in Coca-Cola. The ETF tracks a cap-weighted index that measures the largest 2,500 stocks in the United States. The YTD price movement of SCHB was 6.8% on July 27.

The iShares Dow Jones Select Dividend ETF (DVY) invests 0.75% of its holdings in Coca-Cola. The ETF tracks a dividend-weighted index of the US companies. The index selects roughly 100 stocks based on dividend yield from a broad market-cap universe.

The market caps of Coca-Cola’s competitors are as follows:

  • PepsiCo (PEP) — $155.1 billion
  • Dr Pepper Snapple Group (DPS) — $18.1 billion

Performance of Coca-Cola in fiscal 2Q16

Coca-Cola reported net operating revenues of $11.5 billion, a fall of 5.7% from the net operating revenues of $12.2 billion in fiscal 2Q15. Net operating revenues from the Eurasia & Africa, Europe, Latin America, Asia-Pacific, and bottling investments segments fell by 5.6%, 1.7%, 3.7%, 2.6%, and 12.1%, respectively, and net operating revenues from North America rose by 2.2% between fiscals 2Q15 and 2Q16. The company’s gross profit margin and operating income rose by 1.8% and 16.0%, respectively. Its net income and EPS (earnings per share) rose to $3.4 billion and $0.79, respectively, in fiscal 2Q16, compared with $3.1 billion and $0.71, respectively, in fiscal 2Q15.

KO’s total cash, cash equivalents, and short-term investments and inventories rose by 37.2% and 3.4%, respectively, between fiscals 4Q15 and 2Q16. Its current ratio and long-term debt-to-equity ratio fell to 1.21x and 1.09x, respectively, in fiscal 2Q16, compared with 1.24x and 1.10x in fiscal 4Q15.

Quarterly dividends

Coca-Cola has declared a regular quarterly dividend of $0.35 per share on its common stock. The dividend will be paid on October 3, 2016, to shareholders of record as of September 15, 2016.

Projections

The company has made the following projections for fiscal 2016:

  • organic revenue growth of 3%
  • comparable currency neutral income before taxes growth in the range of 6% to 8%
  • comparable EPS to be down 4% to 7%
  • effective tax rate of 22.5%
  • share repurchases of $2.0 billion to $2.5 billion

In the next part of this series, we’ll discuss Pilgrim’s Pride.

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