After mentioning this stock (NYSE:KO) over in the US Shares thread I decided to take a look at the last 6 years worth of operating numbers. I must admit that although my earlier obsession with focussing almost exclusively on the ONs, was somewhat flawed, and that one also needs to temper this approach with a qualitative view on the sector, and the company's history and goverance. Indeed I was definitely caught out recently by buying A.G. Barr (BAG) too soon after their profit warning, and prior to doing more research.
However for my way of working, I think it's still better to look at the numbers first, and then focus on news, market sentiment and the company overview in more depth. I'm certainly glad I did that with Coca-cola since otherwise I would have probably burnt a lot of unnecessary time googling and reading various analyst/pundit write ups, since whilst I might missed something (please shout out if so) I did not find their numbers that impressive.
It's easy to spot that revenue has dropped every year since 2013. Earnings and EBIT have taken a similar fall, excepting from 2017 -> 2018 which presumably is mainly down to Trump's tax cuts.
Presumably the dividend growth of 7% against FCFps decline of 5%, means that the dividend has been funded by debt - possibly emphasised by a growing net debt metric?
All in all the numbers above are screaming at me, not to buy this share, and don't to spend any more time on research. Just for a hoot I'm sharing the DCF and EPV valuations my spreadsheet kicks out:
Of DCF analysis is pretty pointless in this case, since it assumes the FCFps is actually growing. But hey.
DCF initial growth 0.020 final 0.020 terminal 0.020 discounted @ 0.0891 | 22.14
DCF initial growth 0.030 final 0.025 terminal 0.020 discounted @ 0.0891 | 23.48
DCF initial growth 0.020 final 0.020 terminal 0.020 discounted @ 0.0771 | 24.82
DCF initial growth 0.030 final 0.025 terminal 0.020 discounted @ 0.0771 | 26.36
DCF initial growth 0.020 final 0.020 terminal 0.020 discounted @ 0.0721 | 27.20
DCF initial growth 0.030 final 0.025 terminal 0.020 discounted @ 0.0721 | 28.92
Earnings power value, if any of these techniques are actually realistic, would be appropriate since it assumes it models all profit being extracted for the owners' benefit and stay-in-business CAPEX, and none for reinvestment in growth.
EPV @ 0.0891 | 17.90
EPV @ 0.0771 | 20.61
EPV @ 0.0721 | 22.00
(EDIT: the Stock price figures are in $, the main analyis ones are mostly $M)