Coca Cola Stock Forecast
Summary
- Why decreasing demand for carbonated drinks will not affect Coca Cola.
- Predicting dividend cash flow using Coca Cola’s solid average dividend growth rate of 9.73% for the last 10 years.
- Why the current market price reflects a measly 1% yearly growth in stock price for the next 10 years.
- Current stock value estimation using an adjusted growth rate and algorithmic forecast.
General
Coca-Cola Company (NYSE:KO) has just celebrated 50 years of consistent dividend growth; moreover, they have done everything necessary to maintain that dividend growth. Warren Buffett (the largest shareholder of Coca Colawith a 9.1% stake in the business), whose Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has averaged an annual gain topping 18% for 30 years, held his stock position since 1988 in Coca Cola recognizing how the company understands changing markets and portfolio adjustments. He noted in his1988 letter to shareholders that “We expect to hold [it] for a long time. In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.” An investor considering a solid 10 year dividend stock opportunity should strongly consider Coca Cola in his portfolio. This article breaks down some basic value calculations for Coca Cola, following the many recent articles signaling a bearish outlook for the company.
