KO Looking Iffy?

[Kerim]

After my super-long hiatus, I am finally getting around to updating my individual stock spreadsheets. I did KO last night, and was surprised at how poor the numbers are looking. Earnings have at best stalled out or at worst have faltered badly in the last couple of years. As a result, the payout ratio is unsustainable. Anyone have any thoughts about whether and how they're going to get earnings back on track? Are they sitting on a large cash pile to ride this out? How long can they ride before it starts being reflected in the share price. 

From a dividend yield perspective, this would seem like a good time to buy, and one of my favorite strategies is buying best-of-breed companies when they are going through periodic troubles. Is this one of those opportunities?

[DividendDragon]

(02-22-2018, 03:35 PM)Kerim Wrote: After my super-long hiatus, I am finally getting around to updating my individual stock spreadsheets. I did KO last night, and was surprised at how poor the numbers are looking. Earnings have at best stalled out or at worst have faltered badly in the last couple of years. As a result, the payout ratio is unsustainable. Anyone have any thoughts about whether and how they're going to get earnings back on track? Are they sitting on a large cash pile to ride this out? How long can they ride before it starts being reflected in the share price. 

From a dividend yield perspective, this would seem like a good time to buy, and one of my favorite strategies is buying best-of-breed companies when they are going through periodic troubles. Is this one of those opportunities?

I took a look around 3 months back and was equally shocked.

I don't feel there's any compelling reason to buy the stock currently but really don't know what I'd do if I was holding.

Plenty of better, growing stocks out there.

[DividendGarden]

So I hold KO, as it was one of my first investments ever. It's about 3% of my portfolio, but I haven't added to it in a few years. I'm struggling with keeping this one, also, and am glad you posted this. I would love to hear more people's opinions on this.

[EricL]

I don't think the current payout is un-sustainable, but I do think that dividend growth will be rather pedestrian until the payout ratio gets back down to the 55-60% level.

A 3.5% yield with ~5% dividend growth isn't a bad place to be.

[ChadR]

I hold KO too, but no where near the portfolio size as you do Dividend Garden. I'm sitting on my shares. I'm not adding to it (except I haven't turned off the dividend reinvestment), but I'm not selling either. Like Eric said, the 3.5% dividend isn't bad to receive while waiting for them to turn it around.