(01-07-2021, 09:18 AM)DividendGarden Wrote:(01-07-2021, 09:16 AM)DividendGarden Wrote:(01-07-2021, 07:11 AM)NilesMike Wrote: I don't understand the drop now, we are closer to re-opening things than we have been. I think the drop is way overdone, when the economy re-opens, Coca-Cola will be there as it always has.
There were three analyst downgrades of KO over the last few days, which is what caused the stock to drop. It's crazy that a few analysts can move a stock 10% in three days.
I stand corrected - there was a fourth downgrade this morning. Of course, knowing what I know now, I wouldn't be surprised if their companies were short KO and needed to buy some shares.
KO will make the same $1.90 per share in earnings that it made back in 2011. A time during which it's payout ratio has grown from 50% to 75% of earnings.
The only time it showed EPS growth was in 2018, when it got a windfall from the corporate tax cut.
Since 2011, revenues have steadily declined from $46B to $33.5B, while long-term debt has grown from $13.6B to $39.5B.
Share count isn't even declining anymore, because there isn't enough cash left over after dividends and capital spending to fund buybacks.
KO=IBM, it's just financial engineering at this point. Unless there is a major catalyst, I don't see where growth will come from.