Coca-Cola Company: Stock Valuation and Analysis

Published: 2021-07-16 21:32:25
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The Coca- cola company is known for the manufacturing, distribution and the market of the non-alcoholic b averages. The organization has been paying its dividend since 1983. Also, it has over the time increased the payment to the common shareholders for the last 55yers now (Wilson & Wilson, 2017). Considering the stock distribution of the organization, this paper will, therefore, evaluate the stock performance of the coca cola company.

Beta= 0.67

Dividend and yield=1.48

Enterprise value=1.142

Market cap=195.256

Stock split= yes

Closing stock price45.77

52 week range= 39.88-46.06

Day range=44.35-45.79

News released: "Coca cola earnings beat the street, but the investors arent too jazzed; the article illustrates how the companys stock has risen over the time. It also shows the trend in which the stock has taken over the time. The article can be retrieved from; https://finance.yahoo.com/quote/KO?ltr=1Revenue estimation

The data below can be used to describe the estimate of income of the organization

Revenue estimate Current year Next year

No of analysts 21 23

Low estimate 34.17B 29.02B

High estimate 43.93B 44.76B

According to the evaluation above. It can be concluded that Coca-Cola Company is a good entity for an investor. In the recent trading, the organization has crossed above the average analysts 12 months (Wilson & Wilson, 2017). This was the target price that was previously set at 45.20. It was also recorded that the amount was changing hands for about $ 45.24 shares. According to the expert, when a given stock has reached, and a target that has been set an analyst the analyst is only left with two ways to react. This can be either to downgrade on the valuation or can be significant in readjusting the target price to a much higher level. In most cases, an analysis reaction can also depend on the substantial business development that can be considered important in driving the stock price higher.

The organization can also be considering some of the investment hubs because of its ability to use the debt and equity securities. The organization is known for using the equity method to help in accounting for its major investments. Its equity consideration the organization tend to proportionate the share of earnings, and also the loss of the equity methods that are register on the equity income.

From the data above, only positive signals have been shown regarding the organization. The organization holds both the buying and signals that are retrieved from both the shorter and long term moving averages. The stock has also been portrayed to be having general sell signal from the relation portrayed by both the short and long-term investments Significantly; the organization seems to be finding its support from the accumulated volumes. This is usually where the upside stock tends to be meeting the resistance just above the organization closing stock (Wilson & Wilson, 2017).

The gains that have been received from the stock showed an increase of 0.89%. This w as a considerable amount rings from 44.84 to about 45.24. According to the information given in the Yahoo finance, the price seems to have risen in almost six of the last ten days. Another important reason to consider investing in the organization is the increase in the volume of the price. This is considered to be a positive technical signs, and as such, in total there are about 5.11B more that is likely to be traded in every day.

The relationship between the value of the stock and the price to earnings ratio?

Every investor in stocks seeks to make profits while buying stocks. Therefore, an organization price per earnings ratio and the stock value can provide important insight for an investor to make a good decision on the right time to buy stock. The stock price value and the price per earnings ratio provides insight on the stock potential growth. However, over valuing of stock through better publicity can make a stock buyer to buy stock and still make a loss. Therefore, it is important for the investor to make a comparison between the stock value and the price per earning ration of a company with other similar companies to establish whether the stock is overvalued or undervalued (Voss & Mohan, 2016).

What information does the Market Capitalization (Market Cap) and Beta provide to the investor?

Market capitalization refers to the total market value in dollars of the outstanding organization shares. The market capitalization value is calculated by the multiplication of all the outstanding shares of a company with the price of a single share. The market capitalization is important for the investors because it can be used to measure the size of an organization instead of using sales and assets which can fluctuate. The size of an organization is a significant determinant of the investor's risk. The companies with large market capitalization mean that they have been on the market for long and they can assure the investors with the consistent increase in share value. On the other hand, the middle or average market capitalization companys shows that they are still growing, but they pose a higher risk to the investors than the large market cap organizations (Leote de Carvalho & Moulin, 2012).

On the other hand, Beta refers to the measure of the volatility of a security or organization portfolio compared to the whole market. Beta is used to measure the tendency of the shares returns to respond to the market changes. In this case, a Beta of greater than one indicates that the shares can have great returns but also pose a significant risk in case of a market swing. Below one the beta indicates that the returns will be low, but there is the significant security of the shares from market volatility (Leote de Carvalho & Moulin, 2012).

Reference

Leote de Carvalho, R., Lu, X., & Moulin, P. (2012). Demystifying equity riskbased strategies: A simple alpha plus beta description. The Journal of Portfolio Management, 38(3), 56-70

Wilson, R. E., & Wilson, R. E. (2017). Coca-Cola Amatil: A Bottler Recharging Growth With Energy Drinks. Kellogg School of Management Cases, 1-15.

https://finance.yahoo.com/quote/KO?ltr=1Voss, K., & Mohan, M. (2016). Good times, bad times: the stock market performance of firms that own high value brands. European Journal of Marketing, 50(5/6), 670-694.

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