Coca-Cola rises after announcing upbeat Q4 results

Coca-Cola produced revenue and operating profit growth in Q4, befitting the group’s dominance in the soft drinks market.

The company said revenue grew 12% to $10.8bn in the fourth quarter as operating profit jumped 10%. For a company the size of Coca-Cola to report such strong numbers is a material achievement, solidifying its attraction as a ‘dividend king’.

- Advertisement -

Investors have become accustomed to reliable shareholder returns from Coca-Cola and today’s numbers reinforce the group’s ability to bolster investor income over time.

 Coca-Cola shares were 1.4% higher in the US premarket.

“Coca-Cola’s fourth-quarter results showcased why it’s still the top dog in the soft drink industry. With 61 years of annual dividend increases, investors would be forgiven for thinking this is a boring mature company,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“But double-digit revenue and profit growth suggest otherwise and highlight the fact that this dividend king isn’t resting on its laurels. The revenue uplift came from a healthy mix of both price and volume, at a time when many of its peers are seeing volumes flatten or even decline. The real secret formula to Coca-Cola’s success doesn’t lie in a vault.

- Advertisement -

“Instead, it lies in successfully aligning its interests with those of its bottling partners. The group does this by having a roughly 20-25% stake in its most important bottlers, with a significant portion of the remaining shares typically owned by a single family. This ownership structure helps to align focus on long-term growth, with skin-in-the-game family owners naturally being more patient than your typical public investors.”

Latest News

Subscribe to the UK Investor Magazine email newsletter

Register for our free email newsletter and receive the latest investment news, podcasts, event information and offers.

More Articles Like This

Tagdiv Cloud library - template content.