Coca-Cola(KO) The Motley Fool·2025-02-26 09:10Core Viewpoint - Coca-Cola has maintained a strong dividend history and is recognized for its resilience in the beverage industry, despite challenges in sales and earnings growth over the past decade [1][2][16]. Group 1: Business Performance - Coca-Cola's fourth-quarter results showed a 2% growth in unit case volume, driven by strong performance in China, Brazil, and the U.S., contributing to the recent rise in stock price [3][6]. - For the full year, Coca-Cola achieved a 12% growth in organic revenue, primarily due to price increases and a favorable product mix, despite facing significant currency impacts from a strong U.S. dollar [6][7]. - In Latin America, unit case volumes increased by 3% in 2024, with pricing and mix up 21%, although currency headwinds were 14% worse than in 2023, resulting in an 11% increase in reported net revenue [7]. Group 2: Brand Development and Market Position - Coca-Cola's competitive edge lies in its brand development capabilities, having created 1 billion-plus brands [9][10]. - The company leads in various non-alcoholic beverage categories, including being the top player in water, sports drinks, and juice [11]. - Coca-Cola has effectively diversified its product lineup, with significant growth in brands like Fairlife, which increased from 4 billion in 2024 [12][14]. Group 3: Future Outlook and Valuation - For 2025, Coca-Cola anticipates organic revenue growth of 5% to 6%, with currency-neutral earnings-per-share (EPS) growth projected at 8% to 10% [15]. - The stock is currently valued at a forward price-to-earnings ratio of 23.7 based on a comparable EPS of $2.95 for 2025, indicating a reasonable valuation despite recent stock price increases [15][16]. - Coca-Cola has a dividend yield of 2.8%, which is higher than the average in the consumer staples sector and the S&P 500, making it a solid source of passive income [17].