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Are Coca-Cola’s Shareholder Rewards Better Than Its Peers?

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Total return

As of December 15, 2017, Coca-Cola (KO) has delivered a total return of 15% on a YTD (year-to-date) basis. Nonalcoholic beverage companies PepsiCo (PEP), Dr Pepper Snapple (DPS), and Monster Beverage (MNST) have generated total returns of 17%, 6.1%, and 44.4%, respectively, since the start of 2017.

Coca-Cola’s YTD total return is lower than the S&P 500 Index, which has a YTD total return of 21.9% as of December 15.

A total return or total shareholder return is computed by taking into account the price changes in a stock and include other income such as dividends realized during a certain period.

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Dividend yield

Coca-Cola’s dividend yield is higher than PepsiCo’s and Dr Pepper Snapple’s. Monster Beverage currently doesn’t pay any regular dividends. As of December 15, 2017, the dividend yields for Coca-Cola, PepsiCo, and Dr Pepper Snapple were 3.2%, 2.7%, and 2.5%, respectively.

Coca-Cola is a dividend aristocrat, which is a term used for a company that has raised its dividend for at least 25 consecutive years. In early 2017, Coca-Cola increased its dividend for the 55th consecutive year. It hiked its annual dividend by 6% to $1.48 in 2017.

YTD price movement

On a YTD basis, the stocks of Coca-Cola, PepsiCo, Dr Pepper Snapple, and Monster Beverage have risen 11.4%, 13.9%, 3.6%, and 44.4%, respectively, as of December 15, 2017. Coca-Cola has underperformed the S&P 500 Index, which has risen 19.5% since the start of 2017.

As we saw in Part 1 of this series, the average 12-month price target for Coca-Cola is $48.70, which indicates an upside potential of 5.4%.

For more analysis, be sure to visit Market Realist’s Nonalcoholic Beverages page.

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