Coca-Cola Co Stock Buy Recommendation Reiterated (KO)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Coca-Cola (NYSE: KO) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, notable return on equity, reasonable valuation levels and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

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Highlights from the ratings report include:
  • KO's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 3.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • COCA-COLA CO has improved earnings per share by 13.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, COCA-COLA CO increased its bottom line by earning $1.96 versus $1.85 in the prior year. This year, the market expects an improvement in earnings ($2.14 versus $1.96).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Beverages industry and the overall market, COCA-COLA CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to $2,805.00 million or 4.89% when compared to the same quarter last year. In addition, COCA-COLA CO has also modestly surpassed the industry average cash flow growth rate of -2.75%.

The Coca-Cola Company, a beverage company, engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. The company primarily offers sparkling beverages and still beverages. Coca-Cola has a market cap of $166.89 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 18.5, above the S&P 500 P/E ratio of 17.7. Shares are up 2.6% year to date as of the close of trading on Thursday.

You can view the full Coca-Cola Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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