1 Magnificent Dividend Growth Stock That Could Soar 20% in 2025, According to a Couple of Wall Street Analysts

Core Viewpoint - Wall Street analysts believe Coca-Cola is undervalued despite a recent decline in stock price, suggesting potential for growth and income generation [1][10]. Company Performance - Coca-Cola shares have decreased approximately 15.5% since their peak in September [1]. - The CEO indicated a "challenging operating environment" in China, contributing to stock pressure [4]. - Unit case volume in the Asia-Pacific region fell by 2% year over year, with similar declines reported in Europe, the Middle East, and Africa [5]. Financial Metrics - Coca-Cola distributed $8.1 billion in dividends over the past 12 months, with an expected free cash flow of $9.2 billion in 2024 [8]. - The company has raised its dividend payout by only 18.3% over the past five years, which is below the inflation rate during the same period [9]. Market Sentiment - Analysts from Piper Sandler and TD Cowen have initiated coverage and upgraded Coca-Cola's rating, with price targets of $74 and $75, respectively, indicating potential gains of about 20% [2][3]. - Despite recent challenges, Coca-Cola's organic revenues grew by 9% year over year in the third quarter, suggesting resilience in its business model [10]. Dividend Outlook - Coca-Cola has a long history of dividend payments, having raised its payout for 62 consecutive years, currently offering a yield of 3.2% [11]. - While rapid dividend growth is unlikely, the strength of Coca-Cola's brands may allow for continued increases in dividends that outpace inflation over the next decade [12].