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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Coca-Cola Company (XNYS:KO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
KO
Name:
THE COCA-COLA COMPANY (XNYS:KO)
Sector:
406.00M
Industry:
Beverages�Non-Alcoholic
CEO:
Mr. James Quincey
Total Employees:
79,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -2083.42% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE COCA-COLA COMPANY(KO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BEVERAGES�NON-ALCOHOLIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
61.15
One Month Price Target:
$61.34
Six Month Price Target :
$62.27
Likely Price in One Year's Time:
Ticker:
$63.4
Likely Trading Range Today Under (Normal Volatility)
$61.
Price Upper limit ($) :
$61.33
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$59.19
This week:
$56.76
This month :
$52.37
Other Primary facts
Market Cap:
264.67B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
4.32B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
6.48%
-9.67%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$70.26
$66.08
$52.04
$56.22
Medium risk (<10%) entry points
Buy Call
Sell Call
$64.71
Buy Put:
Sell Put:
$63.82
$57.57
$58.48
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
KO
Sharpe Ratio:
1.39%
Comparison:
KO, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -65.55% lower than the industry
& is -39.05% lower than the market/S&P 500 average
Average Returns/Yield of
KO
Daily returns:
0.03%
Weekly returns:
0.15%
Monthly returns:
0.62%
Yearly returns:
36.41%
Comparison of returns:
Average annual returns/yield (last 3 years) is -79.72% below industry average
Classification:
KO, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.73
Statistical test of Returns:
KO has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.58%
Weekly Volatility:
3.53%
Monthly Volatility:
7.06%
Yearly Volatility:
24.45%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.79%
Volatility in last five trading days has been -50.22% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.21%
Weekly VaR:
-7.18%
Monthly VaR:
-14.36%
How Much Can the price of
KO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-12%
Worst case (decline):
-49.73%
This translates to price declining to:
$53.60
This translates to price declining to:
$30.74
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
KO is a 1.33% riskier investment compared to the market/S&P 500 & is -13.19% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -39.92% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
KO
Beta in relation to market/S&P 500--0.55
Expected beta in 1 year's time:
0.625
Expected beta in 3 year's time:
0.883
Unlevered (debt free) Beta:
0.251
Beta in relation to Nasdaq (XNAS):
0.455
Beta in relation to all global stocks::
0.544
Beta Comparison & Analysis
Beta of competitors/peers::
0.79
Beta is -30.77% lower than peers
Average Industry Beta:
0.913
Beta is -40.07% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
11.39%
Sustainable growth rate is -29.54% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.005
Alpha is -98.19% below industry average alpha yield
Alpha is 31% compared to market & is healthy
Analysis of Cost of Capital of
KO
Equity cost of capital:
0.069
Equity cost of capital is -26.65% below industry mean WACC
Unlevered (without debt) cost of capital:
3.17%
Before-tax cost of debt:
3.21%
After-tax cost of debt:
2.53%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.53%
WACC is -39.32% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$9.28
Revenue growth rate per share of (3Y):
9.85
Annual revenue growth rate is -71.61% below industry average
EPS:
$2.37
Expected Annual growth rate of EPS (3Y):
2.49%
Expected future EPS growth rate is -87.39% lower than the Beverages�Non-Alcoholic industry
Free cash flow (FCF) per share:
$2.31
Balance sheet equity growth per share: 7.66%
Equity growth rate per share is -90.15% lower than the industry
Debt per share
$8.57
EBITDA per share
$3.66
Valuation Analysis Today of
KO
P/E Ratio:
27.8
P/E Ratio of Competitors/Peers:
25.56
P/E ratio is 8.78% higher than main peers & is -77.24% lower than the industry
Stock price/value with industry average P/E ratio: $289.50
KO is -78.88% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $48.89
Present value of the expected future dividends only: $29.30
P/S (Price to Sales ratio):
6.59
Price to sales ratio is 3.62% above the industry mean
P/B (Price to book value ratio):
9.85
Price to free cash flow: 26.46
Price to free cash flow ratio is -64.76% lower than the industry
Net income growth rate (3Y):
49.79%
Net income growth rate is -137.94% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 18.49%
Dividend yeild: 2.81%
Previous Dividend: $0.44
Previous adjusted dividend: $0.44
Previous Dividend: $1.72
Expected next dividend best case: $0.45
Expected next dividend worst case: $0.43
Average dividend payment (long-term): $0.42
Average dividend increase/decrease (growth rate) % per period: 0.97%
Expected next dividend payment date: 29/09/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 07/01/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$0.44
2021-11-30--$0.42
2021-06-14--$0.42
2022-03-14--$0.44
2021-09-14--$0.42
2021-03-12--$0.42
Dividend growth rate is -18.30% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
149.13%
Net debt to equity ratio:
136.93%
Debt to assets ratio:
39.39%
Net debt to assets ratio:
36.17%
Debt-to-asset ratio is -24.81% below industry average
Ability to repay debt:
Interest coverage ratio:
11.84
Interest coverage ratio is -269.66% less than industry average
Looking forward:
Debt growth rate:
-0.07%
Annual debt growth is -96% lower than industry average debt growth rate
Debt repayment rate in last quarter: 2.74%
Analysis of Key Statistics
Correlation of price movement with the market:
0.701
Statistical significance of correlation:
KO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.541
Stock price is 29.69% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.541
Correlation of price movement with Nasdaq (^IXIC):
0.073
Covariance of price movement with the market:
0.067
Kurtosis
6.57
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.689
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
KO
Gross Profit Margin Ratio:
241%
Operating Profit Margin Ratio:
27.39%
Operating profit margin is 89.71% higher than the industry
Net Profit Margin Ratio:
241%
Effective Tax Rate:
21.17%
Effective tax rate is 8.36% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
41.49%
Return on equity (ROE) is 33.15% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.96%
Return on assets (ROA) is -3.16% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
1.18
Current ratio is -42.66% below industry average
Cash Conversion Cycle (days):
-56.2
Cash conversion cycle is -162.18% below industry average
The remaining useful life of property plant & equipment is: 3.9 years
Stock based compensation to net income ratio:
0.84%
In-depth Efficiency Analysis
Revenue generated per employee:
507.9K
Each employee generates -42% less revenue than industry average revenue per employee
EBITDA generated per employee:
200.4K
Each employee generates 16% more EBITDA than industry average revenue per employee
Profit generated per employee:
130.5K
Each employee generates 11% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
5.1K
Each employee generates -77% less free cash flow than industry average revenue per employee
Assets/Capital per employee
910.2K
Each employee generates -77% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
KO
Philip Morris International Inc. (XNYS:PM)
UNILEVER PLC (XNYS:UL)
THE ESTEE LAUDER COMPANIES INC. (XNYS:EL)
DIAGEO PLC (XNYS:DEO)
WALMART INC. (XNYS:WMT)
TARGET CORPORATION (XNYS:TGT)
Anheuser-Busch Inbev SA (XNYS:BUD)
Altria Group, Inc. (XNYS:MO)
BRITISH AMERICAN TOBACCO P.L.C. (XNYS:BTI)
Current Analyst Ratings
Strong buy�17%
Buy�29%
Hold�54%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/1/22
Revenue:
40.13B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
15.94B
24.18B
-
5.65B
12.44B
6.79B
- 268000.00K
12.17B
288.00M
1.34B
1.41B
15.83B
10.99B
10.31B
13.12B
2.78B
10.31B
Statement of Cash Flow
Date:
Period:
324.00M
Differed Income Tax :
41.00M
Stock Based Compensation :
87.00M
Change in Working Capital :
- 2468000.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 154000.00K
Net Cash Provided by Operating Activities:
623.00M
Investments in PP&E:
- 217000.00K
Net Acquisitions:
213.00M
Purchases of Investments:
- 835000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/1/22
2022
Q1
7.68B
2.68B
10.36B
4.64B
3.74B
3.42B
22.16B
9.78B
19.60B
15.14B
18.99B
2.01B
6.39B
71.91B
-
94.06B
13.27B
4.65B
866.00M
-
866.00M
18.79B
37.05B
8.25B
48.44B
-
67.22B
1.76B
69.97B
- 13340000.0K
-
April 1, 2022 at 6:00:00 AM
28.12B
24.85B
92.07B
21.66B
41.70B
34.0B
1.32B
- 338000.00K
146.00M
- 1045000.00K
449.00M
- 546000.00K
- 1906000.00K
73.00M
- 2975000.00K
173.00M
- 2033000.00K
7.99B
10.03B
623.00M
- 217000.00K
406.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
KO
2023
2024
2025
2026
2027
$72.02
$74.67
$77.42
$80.26
$83.21