Recent Purchase KO

The holiday season is in full swing and that means lots of holiday parties, shopping for gifts, and trying to finish off 2016 strong. The worst is trying to do all this extra stuff when you’re not feeling well!

As anyone who has followed my journey will know, I regularly added to my holdings from the start of the Niche Fund in July 2015 until about January 2016. There was one purchase in March (no post though) and this most recent purchase in December 2016. I had far less to contribute to my dividend portfolio on a monthly basis as I had a few major purchases to focus on this year. Now that those are out of the way, I will aim to more regularly purchase stocks in 2017.

In early December, markets including the S&P500 were down. I took this opportunity to add to one of my existing holdings, Coca Cola. This was an idea I’ve been looking at for several months as my initial purchase was somewhat smaller than some of my other foundation stock holdings. The best part about this purchase is a significant portion of the money I used to make the purchase included dividend cash received from other holdings in my portfolio. Continued re-investment of the dividend payments will help the portfolio grow at an accelerated rate. Since inception, the Niche Fund has generated a total return of +23%, the S&P500 has returned +8.8% over the same period. What I care about most however is the stability and growth of dividend payments from each of my stocks. So far I have benefited from several dividend increases which will also continue to contribute to the overall growth of the portfolio by increasing the cash available for re-investment.

Screen Results – KO


I won’t go through my whole screen in detail in this post, however my first screen criteria was attractive valuation. This step compares the most recent P/E ratio to the 5 yr. average and index average. KO had a slightly high P/E ratio of 25.5 as compared to its 5 yr. average of 20 and the S&P500 ratio of 19.9. While this demonstrated that KO was trading higher than the index and its 5-year average, the difference was small enough considering other criteria.

Morningstar analysts currently have a fair value of $44.5 and WSJ analysts have a fair value estimate of $46.22. Given the stock price was trading under its 200 day simple moving average of $43.86, and very close to its 52 week low of $39.88, I felt the stock was trading at a slight discount.

Another criteria in my screen is dividend yield greater than 2.5%, which was met with KO’s 3.33%.

Finally, KO is one of the coveted Dividend Kings with an uninterrupted streak of dividend increases over 54 years! Simply Wall St has a cool interface that lets you see a visual representation of equities and KO scores 6/6 on dividends based on past and predicted future dividend payments per share as well as predicted performance against peer companies.


As I didn’t have a lot of extra funds for an investment in a new holding, my aim this month was to add additional shares to one of my existing holdings. I recently added to my initial position in KO with 4 additional shares purchased at $41.5 per share. These additional KO shares will add $5.52 USD in forward annual dividend income to the Niche Fund.

For more info about KO please see their investor relations page.

Disclaimer: long KO. Do your own investment research before making any decisions on stock investments. I have developed my own analysis criteria that help me decide whether an investment is appropriate for me. You should work with a qualified financial advisor to determine an appropriate level of risk before making any investment decisions.

What are your thoughts on KO? Do you currently hold any consumer staples stocks?


5 thoughts on “Recent Purchase KO

  1. I’m building a position in KO slowly over time. I don’t forsee it going under any time soon, and I must say that I like the dividend growth history.


  2. KO is a great long-term stock. I’ve had it for almost 3 years now. I haven’t added to my initial position, but I think the next few months are providing a great buying opportunity. Goldman just downgraded KO to “Sell”, which means to me its the perfect time to add some shares. I think all the soda companies are being pressured due to the next fight against soda and sugar in general. KO has responded as well to this problem as PEP, but given KO’s past experience I think they will be able to adjust to changes in consumer taste and grow accordingly whether organically or through M&A. In the meantime, the dividends make the wait worth it.


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