# KO: The Coca-Cola Company

**Verdict: NEITHER** · Confidence 62% · Value score 29% · Growth score 45%

Value checklist: 2/7 passed (score 29%). Growth checklist: 5/11 passed (score 45%). A profile needs a score of at least 60%. It doesn't clearly fit either profile; the closer fit is growth.

## Company

|  |  |
|---|---|
| Sector | Consumer Defensive |
| Industry | Beverages - Non-Alcoholic |
| Country | United States |
| Market cap | $404.0B |
| Price | $93.90 USD |
| Annual dividend | $2.12 |
| Employees | 65,900 |

The Coca-Cola Company, a beverage company, manufactures and sells various nonalcoholic beverages in the United States and internationally. The company provides Trademark Coca-Cola, sparkling soft drinks and flavors; water, sports, coffee, and tea; juice, value-added dairy, and plant-based beverages; and emerging beverages. It also offers beverage concentrates and syrups, as well as fountain syrups to fountain retailers comprising restaurants and convenience stores. The company sells its products under the Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, caffeine free Diet Coke, Cherry Coke, Fanta, Sprite, Simply, Fanta Orange, Fanta Zero Orange, Fanta Zero Sugar, Fanta Apple, Sprite Zero Sugar, Simply Orange, Simply Apple, Simply Grapefruit, Fresca, Schweppes, Thums Up, Aquarius, Ayataka, BODYARMOR, Ciel, Costa, Crystal, Dasani, Fuze Tea, Georgia, glacéau smartwater, glacéau vitaminwater, Gold Peak, I LOHAS, Powerade, Topo Chico, Core Power, Del Valle, fairlife, innocent, Maaza, Minute Maid, Minute Maid Pulpy, Santa Clara, and dogadan brands. It operates through a network of independent bottling partners, distributors, wholesalers, and retailers, as well as through bottling and distribution operators. The Coca-Cola Company was founded in 1886 and is headquartered in Atlanta, Georgia.

## Value Checklist

| Ratio | Threshold | Actual | Result | Note |
|---|---|---|---|---|
| Price / Earnings Growth (PEG) | Below 1 | 4.03 | Fail | Reported by Yahoo Finance |
| Price / Earnings (P/E) | Below 15 | 28.20 | Fail |  |
| Price / Book (P/B) | Below 1 | 11.18 | Fail |  |
| Return on Equity (ROE) | Above 15% | 42.05% | **Pass** |  |
| Return on Assets (ROA) | Above 4% | 9.40% | **Pass** |  |
| Debt / Equity (D/E) | Below 1 | 1.16 | Fail |  |

## 10-Year EPS Test

| Step | Value |
|---|---|
| EPS 3.8 years ago | $2.19 |
| Current EPS | $3.33 |
| Lowest P/E in period | 19.94 |
| Current share price | $93.90 |
| Annual dividend per share | $2.12 |
| EPS growth rate | 11.66% |
| Projected EPS in 3.8 years | $5.06 |
| Projected trading price (lowest P/E x EPS) | $100.97 |
| Projected value (+ 3.8 yrs of dividends) | $109.02 |
| Annual compound return | 4.01% |
| Hurdle rate | 12.00% |
| Result | **Fail** |

Inputs: FY 2022 EPS (Yahoo Finance (annual statements)); trailing 12-month EPS; lowest P/E in FY 2025

_Only 3.8 years of EPS history available, so this is a shorter test than 10 years._

## Growth Checklist

| Ratio | Threshold | Actual | Result | Note |
|---|---|---|---|---|
| Gross Profit Margin | Above 40% | 61.89% | **Pass** |  |
| Operating Profit Margin | 10% to 25% | 34.87% | Fail | Above the range: very profitable, which fits a mature business more than one reinvesting for growth. |
| Net Profit Margin | Above 10% | 28.56% | **Pass** |  |
| Return on Equity (ROE) | Above 15% | 42.05% | **Pass** |  |
| Current Ratio | Above 2 | 1.30 | Fail |  |
| Quick Ratio | Above 1.5 | 0.80 | Fail |  |
| Accounts Receivable Turnover | Above 7.3 | 14.51 | **Pass** |  |
| Inventory Turnover | Above 7.3 | 4.02 | Fail |  |
| Healthy Working Capital (CA > CL) | Above $0 | $9.8B | **Pass** | Current assets $31.0B vs current liabilities $21.3B |
| Revenue Growth (annual CAGR) * | Above 10% | 3.69% | Fail |  |
| Expected EPS Growth (next year) * | Above 10% | 6.66% | Fail |  |

\* Extra growth signal on top of the core checklist.

## Qualitative Analysis: Value Factors

| Factor | Signal | Evidence |
|---|---|---|
| Small is Beautiful | Against | Large-cap company ($404.0B market cap). It is widely followed by analysts and big investors, so the market is less likely to overlook it. |
| Annuity Business | Neutral | Revenue has been steady, but there is no clear sign it comes from recurring contracts: revenue rose every year for the last 3 years. |
| Durable Competitive Advantage | Supports | Gross margin of 61.9% and net margin of 28.6% show pricing power that competitors haven't eroded, a sign of a moat. |
| Revenues & Commodity | Supports | Revenue from Beverages - Non-Alcoholic isn't tied to commodity prices, so earnings are more predictable. |
| Need for Capital | Against | The business needs significant debt or capital spending: debt-to-equity is 1.16 (threshold: below 1); capital spending uses 29% of operating cash flow. |
| Insider Buying | Neutral | In the past two years insiders made 1 purchases ($998.7K) and 40 sales ($302.6M). Some insiders are buying, but sales outweigh purchases. |

## Qualitative Analysis: Growth Factors

| Factor | Signal | Evidence |
|---|---|---|
| Market Potential | Against | Its market doesn't look like a fast-growing one: revenue has grown 3.7% per year. |
| New Goods/Services & Customer Orientation | Neutral | Not enough R&D and revenue history to judge the product pipeline. |
| Research & Development | Neutral | No R&D expense reported, so the company isn't investing in new technology through R&D. |
| Profit Margins | Supports | Gross 61.9%, operating 34.9%, net 28.6%. High margins show customers are willing to pay for its products. |
| Market Share | Neutral | At $404.0B it is already a dominant player, so there's less room to gain share (revenue growth 3.7% per year). |

## Caveats

- EPS test: Only 3.8 years of EPS history available, so this is a shorter test than 10 years.
- Long-run EPS history comes from Yahoo Finance (about 4 years). Set SEC_USER_AGENT to use 10+ years of SEC filings, or enter the EPS test inputs yourself.

## Sources

- Yahoo Finance (yfinance): price, ratios, financial statements, insider transactions
- Data fetched: 2026-10-19T13:12:19+00:00

> ⚠️ For educational purposes only. This is not financial or investment advice.