24/7 Wall St. Insights

• Coca-Cola Consolidated Inc. (NASDAQ: COKE) just rewarded its shareholders with a 400% dividend hike.
• The bottler also announced a $1 billion share repurchase program.
• Is Wall Street excited about the stock?
• Also: 2 Dividend Legends to Hold Forever.

Coca-Cola Consolidated Inc. (NASDAQ: COKE) is rewarding its shareholders with a quarterly dividend of $2.50, payable on Friday, Nov. 8. That was a 400% increase over the prior payout, and the declaration was accompanied by an announcement of a $1.0 billion share repurchase program for the common stock. That all underscores the management’s commitment to delivering consistent value to investors.

Why Investors Like Dividends

Investors favor dividend stocks for two main reasons. The first is that they offer enticing total return potential. Total return is a comprehensive measure of investment performance that includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. It is one of the most effective ways to boost the prospects of overall investing success.

Dividend stocks can also provide investors with a steady, reliable stream of passive income. Passive income is money that is earned with little to no ongoing effort, usually from assets that generate cash flow. This income can come from a variety of sources, including stock dividends. Generating passive income is a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.

Its Dividend History

Coca-Cola Consolidated has paid a quarterly dividend since the beginning of 2013, and the current yield is 0.8%. Until two years ago, the quarterly payout was $0.25 per share. Between 1994 and 2002, the payout was also $0.25 a share. The dividend doubled in 2023 to $0.50 per share, but note that the most recent payout was not the only one that was generous. In early 2023 and again in early 2024, the company rewarded shareholders with much larger than usual payouts.

Note that the share price has grown by around 1,522% since 2013 as well, offering investors strong growth along with income.

The Company

This company manufactures, markets, and distributes nonalcoholic beverages, primarily products of Coca-Cola Co. (NYSE: KO), to 65 million people in 14 states. Products include sparkling beverages and still beverages, including:

• Energy and sports drinks
• Bottled and enhanced water
• Ready to drink coffee and tea
• Juices

Brands include Dr Pepper and Monster Energy. Its post-mix products are dispensed through equipment that mixes the fountain syrups with carbonated or still water, enabling fountain retailers to sell finished products to consumers in cups or glasses.

The company also sells its products to other Coca-Cola bottlers. It sells and distributes its products directly to grocery stores, mass merchandise stores, club stores, convenience stores, drug stores, restaurants, schools, amusement parks, and recreational facilities, as well as through vending machine outlets.

Its headquarters are in Charlotte, North Carolina. The company was founded in 1902 by J.B. Harrison, the great-grandfather of the current chief executive. Competitors include Fomento Económico Mexicano SAB de C.V. (NYSE: FMX), National Beverage Corp. (NASDAQ: FIZZ), and PepsiCo Inc. (NYSE: PEP).

When the company declared the dividend and announced the buyback plan, CEO J. Frank Harrison III said, “As we’ve previously stated, the progress we’ve made improving our profitability and strengthening our balance sheet allows us to reinvest in our business and our teammates while taking steps to build long-term value for our stockholders.”

The Stock

The share price has grown more than 336% in the past five years, handily outperforming the S&P 500 in that time. Year to date, the stock is up about 28%, about the same as the S&P 500. Coca-Cola Consolidated shares hit an all-time high of $1,376.84 in September.

However, just one analyst has a rating, Neutral, on the stock, and so there is no consensus price target. Institutional investors hold more than 52% of the shares. BlackRock and Vanguard have notable stakes, but Coca-Cola is the largest shareholder with a 26% stake. Over 5 million shares, or less than 2% of the float, are held short.

Coca-Cola Price Prediction and Forecast

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