With the crumbling economy forcing companies to cut dividends, Coca-Cola ( KO) last week announced a 7.9% boost to its quarterly payout, the 47th consecutive annual increase.

Before Coke's hike in its dividend to 41 cents a share, the globally diversified firm said fourth-quarter revenue fell slightly because the dollar rebounded. Still, earnings per share rose 10% to 64 cents from a year earlier. Analysts forecast earnings to climb 24.5% to $3.10 a share this year and gain an additional 9% to $3.38 a share in 2010.

Investors are more favorable to Coke than they have been. The company's stock has fallen only 5.5% this year, making it the Dow's second-best performer. In the past year, the shares have declined 25.1%, earning a ranking of No. 10.

TheStreet.com Ratings' quantitative model, which examines a company's valuation metrics, financial situation and analysts' consensus expectations of future growth, awards Coke a B-minus, which equates with a "buy" recommendation.

With a dividend yield topping 3.5% and priced at a modest 13.8, Coke's reward grade from TheStreet.com Ratings is a B-plus. Its $9.3 billion in debt and price of nearly five times book value hold the firm's risk grade to a C-minus.

With some of the most universally recognized products on Earth, the firm is dependent on sales around the globe. Coke's unit volume in the crucial Chinese market increased 29% in the fourth quarter and 19% for the year.

Worldwide Appeal Keeps Coke a 'Buy'
Company
COCA-COLA
Ticker
KO
Industry
Beverages
TheStreet.com Ratings Reward Grade
B+
TheStreet.com Ratings Risk Grade
C-
TheStreet.com Ratings Overall Grade
B-
TheStreet.com Ratings Recommendation
Buy
Recent price
42.84
Market Cap ($Mil.)
99,112.7
Total Assets ($Mil.)
40,519.0
Total Debt ($Mil.)
9,312.0
Latest Fisc. Yr. Revenue ($Mil.)
31,944.0
Cash Flow from Operations ($Mil.)
7,571.0
Earnings Before Interest & Taxes ($Mil.)
8,796.0
3-Yr. EPS Ann'l Growth Rate (%)
22.1
EPS - Latest Avail. 12 Mos.
2.49
EPS - Curr. Year Consensus
3.10
EPS - Next Yr. Consensus
3.38
Price/Book Ratio
4.8x
Ret'n on Equity (%)
29.4
P/E - Current Year
13.8x
P/E - Next Year
12.7x
Dividend Yield (%)
3.55
Source: TheStreet.com Ratings (Data as of 2/20/2009).

For an explanation of our ratings, click here.
Richard Widows is a senior financial analyst for TheStreet.com Ratings. Prior to joining TheStreet.com, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.