The board of directors of Coca-Cola Enterprises Inc. (CCE), the western European bottler of The Coca-Cola Company (KO), recently announced a 25% increase in its quarterly dividend, marking the seventh consecutive year of dividend hike. The first quarterly dividend will be paid on Mar 20, 2014, to shareholders as of Mar 07, 2014.
The quarterly dividend was increased from 20 cents to 25 cents per common share, equivalent to an annual dividend of $1.00 per share for fiscal 2014, up from 80 cents per share for fiscal 2013. The new dividend will yield 2.3% annually.
Driving shareholders’ value, either through regular share repurchases or increased dividends, is Coca-Cola Enterprise’s key objective. The bottling company achieves this objective through its solid balance sheet and strong free cash flows. The company has $488 million of cash and cash equivalents as of Sep 27, 2013.
Year-to-date, through the third quarter, the company has repurchased approximately $900 million worth of its stock. In Dec 2013, the board of directors of Coca-Cola Enterprises authorized a new $1 billion share repurchase program, which is the company’s fourth buyback program since its origination in 2010.
In 2014, the company expects to buyback $800 million worth of stock. Coca-Cola Enterprises expects free cash flow for full-year 2014 to be in the range of $600 million–$650 million.
Coca-Cola Enterprises carries a Zacks Rank #3 (Hold). A better-ranked beverage stocks is The WhiteWave Foods Co. (WWAV) which carries a Zacks Rank #1 (Strong Buy). Another consumer staple company worth considering is Monster Beverage Corp. (MNST) with a Zacks Rank #2 (Buy).
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