Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Dividend Aristocrats Part 49: The Coca-Cola Co (KO)

Page 1 of 2

Reading headlines about The Coca-Cola Co (NYSE:KO), you would think the company will be shutting its doors soon.

Articles Like:

– The End of the Coke Era on Business Insider

– Coca-Cola: End of an Era? on Seeking Alpha

– Is This The End of Coca-Cola As We Know It? on NASDAQ

Make it sound like Coca-Cola is on its last legs.

People here Coca-Cola, and they think of the iconic soda; and they are right to – Coca-Cola is the global leader in soda.

But there’s more to Coca-Cola than soda…

KO Infographic
Source: Coca-Cola Investor Relations

Coca-Cola is the global leader in:

– Still (non-carbonated) beverages

– Ready-to-drink coffee

– Ready-to-drink juice

The company has 20 brands that generate more than $1 billion a year in sales. And no, they aren’t all soda brands.

Of Coca-Cola’s 20 billion dollar brands 14 are non-carbonated.

It’s time we stop thinking about Coca-Cola as a soda business, and start thinking about Coca-Cola as a global beverage business.

During the third quarter of the last year, Coca-Cola’s popularity among the investors tracked by Insider Monkey registered a decline, as the number of funds with long positions slid to 54 from 62. However, the aggregate value of their holdings fell just slightly to $1.93 billion from $1.95 billion and was equal to 11.10% of the company’s outstanding stock at the end of September. Warren Buffett’s Berkshire Hathaway is betting big on Coca-Cola, owning 400 million shares, followed by Donald Yacktman’s Yacktman Asset Management and Ken Fisher’s Fisher Asset Management with 24.89 million shares and 10.29 million shares, respectively.

Coca-Cola’s Simple Growth Story

The growth story surrounding Coca-Cola is surprisingly simple.

If people continue to drink beverages, Coca-Cola will continue to grow its earnings.

As long as more people prefer any type of beverage to tap water, Coca-Cola will very likely grow.

That’s about as safe an investment as can be made.

Fortunately for Coca-Cola, greater numbers of people in the world are able to afford buying the company’s expensive (relative to tap water) beverages.

Over the next 5 years, the global middle class is expected to increase by 700 million. Personal consumption growth is expected to increase 20 trillion. The image below highlights this growth:

KO Abundant Growth
Source: Coca-Cola September 2015 Barclay’s Presentation, slide 4

Margin Improvement Programs

Coca-Cola CEO Muhtar Kent is focused on improving Coca-Cola’s margins. Margin enhancing cost-cutting moves in 2015 are shown below:

– 4 Plant closures

– Closed or converted 7 distribution facilities

– Reduced non-bottling headcount by ~10% (over 1,600 people)

The company is also refranchising many North American bottlers and consolidating bottling agreements in other parts of the world.

Coca-Cola has also initiated zero-based budgeting. This process requires all expenditures to be approved, forcing management to regularly justify expenditures to create a more efficient organization.

Coca-Cola’s margin improvement program is expected to generate $3 billion in savings per year by 2019.

Follow Coca Cola Co (NYSE:KO)
Trade (NYSE:KO) Now!
Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!