05-26-2015, 09:12 AM
(05-25-2015, 05:00 PM)notexactly Wrote: Hey guys, quick question about KO if you don't mind, trying to get a better understanding.
When looking on Morningstar, I see two things
1. PSR ratio indicates the stock is overvalued (i'm assuming)
2. P/E TTM is higher compared to others in the industry
With this in mind, what makes KO attractive to a Dividend growth investor? How are you guys going about valuing your companies to decide that KO is a good choice.
Would really appreciate an explanation.
Thanks guys.
1. I don't use PSR at all so I can't comment on that point.
2. PE based on 2015 earnings estimates is only 20.5, which is slightly above the 10 YR normal PE ratio for KO of 19.3.
KO is attractive to dividend growth investors because of its relatively high dividend yield of 3.2%, its AA credit rating, 8-10% annual dividend growth rate and the fact that it has been paying an increasing dividend for the last 52 years.
It is one of the bluest of the blue chips.