Coca-Cola has done a little better than the S&P 500 over the last five years. That’s not what you'd expect from a “boring” beverage company. So this week on Dividend Live, I ran Coke through Stock Simplifier from top to bottom, then opened the 10-K to see what the screen missed.
What we covered:
Why Coke is an asset-light business (it sells the syrup and the brand; the bottlers buy the trucks)
The moat: real, but thinner than most people assume. Switching costs are close to zero.
Growth, management, and the risks, including GLP-1 weight-loss drugs and the shift from “Diet” to “Zero”
Valuation: about 28 times earnings, against a five-year average near 24
Two one-time hits in the 10-K (the IRS tax-dispute deposit and the Fairlife payment) that make price to free cash flow look worse than it is
A reverse DCF to see what today’s price is asking of the business
Dividend safety for a Dividend King
In the Q&A, we got into why T-Mobile and the telecoms dropped on the Starlink news, whether “boring” belongs in your portfolio, and Broadcom and the AI spending boom.
Timestamps
0:00 Welcome
1:13 Coca-Cola at a glance
4:07 How Coke actually makes money
7:05 What phase is Coke in?
8:08 The moat
10:46 Growth
14:06 Management
15:59 Risks: GLP-1s and the move to Zero
19:46 Valuation
21:20 What the 10-K revealed: IRS and Fairlife
24:34 Reverse DCF
27:21 Dividend safety
28:21 Q&A
29:54 Why is T-Mobile down?
31:12 Is boring Coke worth owning?
37:16 Broadcom and AI spending
45:09 Wrap-up and next week
Dividend Live runs every Thursday at 10am ET. Next week’s company is up to you. Watch for the poll on Notes (Broadcom and Broadridge are already in the running).
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This is education, not investment advice. Do your own research before you buy anything.