Coca Cola Raises Its Dividend...Again - Analyst Blog

By Zacks Equity Research,

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Coca Cola Company ( KO ) hiked its quarterly dividend to 51 cents per share from 47 cents per share.  On an annualized basis, Coca Cola's dividend equates to $2.04 per share compared with $1.88 a year earlier. Management said that the dividend hike reflects "confidence in the company's long-term cash flow."

The increased dividend is payable on April 1, 2012 to shareholders of record on March 15, 2012. The company hiked its dividend by 8.5% and Coca Cola boasts a record of increasing its dividend for 50 years consecutively.

The move comes two weeks after the company posted outstanding fiscal 2011 earnings of $3.84 cents per share, 10.0% higher than the year-ago earnings. The growth was mainly attributable to solid growth in concentrate sales and positive price/mix.

The company also repurchased shares worth $2.9 billion in 2011, at the high end of the previous guidance range of buying shares worth $2.5 to $3.0 billion.

The world's biggest beverage firm's annual dividend of $2.04 a share amounts to a current yield of 3%, compared to 2.7% yield existing at present. The yield provided by the shares of the company ranks second only to its rival Dr Pepper Snapple Group ( DPS ) among the nine dividend-paying companies in IBD's Beverages-Non Alcoholic group.

These increased returns are supported by strong cash flows, which provide a solid foundation for the distribution. Cash from operations was up 7% in 2011, excluding the significant pension contributions made in the first quarter of 2011.

We currently have along-term Neutral rating on Coal Cola. For the short term (1-3 months), the stock retains a Zacks #3 Rank (Hold).

DR PEPPER SNAPL ( DPS ): Free Stock Analysis Report
COCA COLA CO ( KO ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: DPS , KO

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