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’.
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.
“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.”
