Demand Strong For Coke Zero, Energy Drinks


Even though soda consumption continues to fizzle, beverage bottlerCoca-Cola Enterprises ( CCE ) is still showing some pockets of strength.

Consumption of carbonated soft drinks fell 3% in 2013, according to Beverage Digest. That marks the ninth straight drop. Coca-Cola Enterprises, one of the world's biggest bottlers of Coca-Cola products, has seen strength in Coke Zero and energy drinks.

Sales of Coke Zero, which has no carbohydrates and no calories, grew by double digits in three of the past four quarters. The drink is targeted at young adult males leery of girlie diet sodas.

Energy drinks have also been a strong performer for Coca-Cola Enterprises. Last year, its line of energy drinks grew more than 10%. The company's energy portfolio includes theMonster Beverage ( MNST ) Monster andCola-Cola ( KO ) Relentless drinks.

Coca-Cola Enterprises will report first-quarter results April 24 before the market's open. The company is expected to deliver earnings of 44 cents a share, up 13% from a year ago. That would mark the third straight period of double-digit growth. Bottom-line growth accelerated in the past two quarters.

The firm's sales are expected at $1.93 billion, up 4% from a year ago. Revenue rose 5% and 6% in the latest two quarters.

In February, Coca-Cola Enterprises raised its quarterly dividend by 25% to 25 cents a share. That marked its seventh straight annual dividend hike. Its dividend has more than doubled in the past three years.

On an annual basis, Coca-Cola Enterprises pays $1 a share, which works out to a yield of about 2.2%. Although that is one of the lowest yields among the 10 dividend payers in the Beverages-Non Alcoholic group, Coca-Cola Enterprises has the best Composite Rating among its peers.

Besides dividends, the company has returned cash to shareholders through stock buybacks. It plans to repurchase about $800 million of its own shares this year.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Investing Ideas

Referenced Stocks: CCE , MNST , KO

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