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The Coca-Cola Company (KO)

Company Dividend Discount ModelIndustry: Beverages - Non-AlcoholicSector: Consumer Defensive

Valuation Snapshot

Stable Growth$35.12 - $57.90$45.24
Multi-Stage$43.69 - $47.73$45.67
Blended Fair Value$45.45
Current Price$65.67
Upside-30.78%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS4.08%4.56%1.941.841.761.681.631.591.541.461.401.33
YoY Growth--5.12%4.41%5.02%2.91%2.95%3.03%5.13%4.58%5.26%7.31%
Dividend Yield--2.75%3.01%2.85%2.67%3.11%3.71%3.29%3.37%3.30%2.84%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)13,031.00
(-) Cash Dividends Paid (M)8,476.00
(=) Cash Retained (M)4,555.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)2,606.201,628.88977.33
Cash Retained (M)4,555.004,555.004,555.00
(-) Cash Required (M)-2,606.20-1,628.88-977.33
(=) Excess Retained (M)1,948.802,926.133,577.68
(/) Shares Outstanding (M)4,315.254,315.254,315.25
(=) Excess Retained per Share0.450.680.83
LTM Dividend per Share1.961.961.96
(+) Excess Retained per Share0.450.680.83
(=) Adjusted Dividend2.422.642.79
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.08%3.08%4.08%
Fair Value$35.12$45.24$57.90
Upside / Downside-46.51%-31.11%-11.83%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)13,031.0013,432.0113,845.3614,271.4214,710.6015,163.3015,618.20
Payout Ratio65.04%70.04%75.03%80.02%85.01%90.00%92.50%
Projected Dividends (M)8,476.009,407.2310,387.7511,419.7012,505.3313,646.9714,446.83

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.08%3.08%4.08%
Year 1 PV (M)8,539.088,622.738,706.39
Year 2 PV (M)8,558.948,727.468,897.62
Year 3 PV (M)8,540.888,794.369,052.81
Year 4 PV (M)8,489.718,827.319,174.87
Year 5 PV (M)8,409.758,829.839,266.53
PV of Terminal Value (M)145,992.99153,285.58160,866.72
Equity Value (M)188,531.35197,087.27205,964.94
Shares Outstanding (M)4,315.254,315.254,315.25
Fair Value$43.69$45.67$47.73
Upside / Downside-33.47%-30.45%-27.32%

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