Investors who want to cash in on The Coca-Cola Company’s (NYSE:KO) upcoming dividend of $0.37 per share have only 6 days left to buy the shares before its ex-dividend date, 30 November 2017, in time for dividends payable on the 15 December 2017. So if you want to cash in on KO’s dividend payment and are not yet a shareholder, you have only few days left! Today I am going to take a look at KO’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for KO
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
- Is it the top 25% annual dividend yield payer?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has the amount of dividend per share grown over the past?
- Does earnings amply cover its dividend payments?
- Will it be able to continue to payout at the current rate in the future?
Does Coca-Cola pass our checks?
The current payout ratio for KO is 137.39%, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 79.01%, leading to a dividend yield of 3.42%. Moreover, EPS should increase to $1.77, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. KO has increased its DPS from $0.68 to $1.48 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes KO a true dividend rockstar. Compared to its peers, KO has a yield of 3.23%, which is high for beverages stocks.
What this means for you:
Are you a shareholder? Investors of Coca-Cola can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, KO is one worth keeping around in your income portfolio. But, depending on your portfolio composition, it may be worth exploring other dividend stocks to enhance your diversification, or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Keeping in mind the dividend characteristics above, KO is definitely worth considering for investors looking to build a dedicated income portfolio. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Another aspect to consider for KO is how much it’s actually worth. Can you still benefit from a mispricing of the stock? Take a look at our latest free analysis to find out!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.