Coca Cola ($KO) - Good Price or Good Company ? Better Than Pepsi ?
My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?
"Why not both" I asked myself ?
Wouldn't there be more upsides comparatively speaking ?
Having put the theory to test on different company types (see below for details); time to try it on a food & beverage company ?
I have posted about Pepsi Co on 13 Feb 2023 (click here to read about Pepsi q4 2022 earnings); it is only natural to cover $Coca-Cola(KO)$ and make a comparison - right ! LOL !
Sidetrack: Below are other stocks of diverse industry-types that I have covered. Interested ? Click to read.
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- Uber Technologies
- CVS Health Corp
- Meta Platforms (Facebook)
- Apple Inc
- Amazon Inc
- Alphabet (Google)
- T-Mobile Inc
- McDonalds Inc
- United Parcel Services (UPS)
- AMD
- General Motors
- Visa Inc
- An American carbonated soft drink manufacturer
- Founded on 8 May, 1886, a 136 years old company.
- It oversees the manufacturing, distribution, and marketing of its products.
- Expanded from its namesake product Pepsi Cola to an immensely diversified range of food and beverage brands.
- It got to its current mega cap via strategic acquisitions
- In 2001, it bought food conglomerate Quaker Oats Company & just like that added Gatorade brand to its portfolio
- In 2020, it made the largest acquisition -Pioneer Foodsfor US$1.7 Billion
- In 2021, it also bought over remaining 61% of its subsidiary,Tropicana products
- Cannot help but noticed the glaring difference in product range between Coca Cola & Pepsi.
- The former is purely a "drink" shop with nary a diversified product. The latter is not just drink but fast food and snacks.
In 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did Coca Cola fare ?
- Revenue came in at $10.13 Billion vs $10.02 Billion (Expected) vs $9.46 Billion (Q4 2021); that's a +7.0 % gain
- Net income (GAAP) came in at $2.0 Billion vs $2.4 Billion (Q4 2021); that's a -16.67% decline.
- Earnings per share (GAAP) was $0.47 vs $0.56 (Q4 2021); that's a -16.07% decline.
- Earnings per share (non GAAP) was $0.45 vs $0.45 (Q4 2021); that's neutral / flat.
Coca Cola - Revenue by Segment
- North America still accounts for the lion's share of the revenue. It's growth is a respectable +14% gain.
- Bottling Investments Group (a division of Coca‑Cola Company dedicated to investing in Coca‑Cola bottling operations around the world) was 2nd revenue contributor and grew +4% for the quarter.
- Latin America grew a healthy +25%.
Coca Cola - Unit case volume growth
- “Unit case volume” means the number of unit cases (or unit case equivalents) of Coca Cola beverages directly (or indirectly) sold to customers /consumers
- For the latest quarter, both - Sparkling soft drinks & Tea, coffee, hydration & sports registered "flat" growth.
- Its nutrition, juice, dairy & plant based beverages saw a -7% dipped in revenue.
- Operating profit came in at $2.08 Billion vs $1.67 Billion (Q4 2021); that's a +24.55% gain
Coca Cola's CEO on Q4 2022 Results
As we begin 2023, we continue to invest in our capabilities and strengthen alignment with our bottling partners to maintain flexibility. We are keeping consumers at the centre of our innovation and marketing investments, while also leveraging our expertise in revenue growth management and execution.. Coca Cola, CEO, James Quincey......
Is Coca Cola A Good Price Or A Good Company ?
- Coca Cola (like Pepsi Co) would have reported a better earnings results; had it not been for the impairment charges & write-downs of its Russian assets and other items.
- Company expects to deliver organic revenue (non-GAAP) growth of 7% to 8%.
- For comparable net revenues (non-GAAP), the company expects a 2% to 3% currency headwind based on the current rates and including the impact of hedged positions, in addition to an approximate 1% headwind from acquisitions, divestitures and structural changes.
- Do you think Coca Cola Quarterly Earnings is a credible performance ?
- Do you think Coca Cola is a good company, at a good entry price now ?
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