Growth in financial performance is not that important to Coca-Cola investors. Most see KO as a large company that has been increasing dividends since 1963. Many refer to the company as a U.S. Treasury bond with a higher coupon. Today, the dividend yield on knockout shares is just under 3% and the company`s payout ratio has increased significantly. Since its invention by John Stith Pemberton in 1886, criticism of Coca-Cola as a product and of the Coca-Cola Company`s business practices have been significant. The Coca-Cola Company is the world`s largest soft drink company, distributing more than 500 different products. Since the early 2000s, criticism of the use of Coca-Cola products, as well as the company itself, has intensified, with the company criticized for its impacts on health, environmental issues, animal testing, economic business practices and employee issues. The Coca-Cola Company has faced several lawsuits for various critics. In September 2012, workers at a Coca-Cola bottling plant in Fort Worth, Texas, voted against Teamsters representation after the company made extensive use of anti-union consultants. This would be the company`s first unionized facility in the southern United States. In 2014, the company was charged with 27 clean air law violations at a minute cleaning plant in Michigan.
[30] [31] Coca-Cola is a big company, but we avoid it. The company`s revenues have declined over the past 10 years, so management is severely constrained to maintain high profitability. In addition, asset turnover is declining. The only instrument to increase the return on equity in the coming years can only be financial leverage. The current dividend yield is quite low and the payout ratio is increasing. According to our estimate, the company is trading at a 25% premium to the fair price. In addition, the knockout is also trading well above the 10-year averages of the multipliers. We are neutral vis-à-vis the company. In 2009, the Center for Science in the Public Interest sued Coca-Cola for misleading health claims about its VitaminWater beverage line, which the company had purchased two years earlier. Coca-Cola admitted that VitaminWater was not a health product, but tried to dismiss the case anyway. He failed and the class action lawsuit is pending in Federal Court.
In 2011, the UK`s Advertising Standards Authority banned Coca-Cola from claiming that VitaminWater was “nutritious”. In 1944, Escola was a waitress in a restaurant. She was emptying glass bottles of Coca-Cola when one of the bottles spontaneously exploded in her hand. It successfully argued that the company was liable. Coca-Cola received our worst rating for the likely use of tax evasion schemes, and its highest-paid executive received an incredible £13.9 million in 2019. The company strongly opposes attempts to introduce mechanisms such as container privilege. [25] [26] In 2013, the company was criticized in Australia for litigation that led to the invalidity of a bottle recycling deposit. [27] [28] Ireland`s largest union, the Services Industrial Professional and Technical Union (SIPTU), told Ethical Consumer that Coca-Cola had refused to cooperate with representatives of the company`s Ballina plant. In 2012, Coca-Cola and PepsiCo changed the composition of the caramel color used in their cola products to avoid a cancer warning required by California law for the ingredient 4-methylimidazole. Coca-Cola consoled itself with the results of a study commissioned by the company by an Indian research group called TERI, which found no basis for allegations of pesticide contamination, but the report also raised questions about the location of bottling plants at “water-stressed” sites. The campaign against Coca-Cola continued to be led by groups such as the India Resource Center, which described the fight as a climate justice issue.
In 2010, a government panel found that the bottling plant of Coca-Cola`s Indian subsidiary in Kerala had caused environmental damage and depleted groundwater. He recommended that the company be ordered to pay approximately $47 million in compensation to local supervisors. Coca-Cola is also active in polluting industries such as motorsport and fish sales. In 2012, human rights activists accused Coca-Cola of supporting the dictatorial regime of King Mswati II of Swaziland, where the company operates a concentrate plant. In total, the company reportedly spent nearly $7 million on lobbying in 2019. Coca-Cola received Ethical Consumer`s worst rating for supply chain management. The company and its subsidiaries have also been accused of contributing to Mexico`s water scarcity, appropriating Guarani culture and using child labor in its Mexican recycling system. In November 2000, Coca-Cola agreed to pay $192.5 million to settle a racial discrimination class action lawsuit and pledged to change the way it manages, promotes and treats minority employees in the United States. In 2003, protesters at Coca-Cola`s annual meeting claimed that blacks remained underrepresented in the company`s top management, were paid less than white employees, and were fired more frequently. [49] In 2004, Luke Visconti, co-founder of DiversityInc., which evaluates the company after its diversity efforts, stated, “Due to the settlement order, Coca-Cola was forced to adopt management practices that placed the company in the top 10 for diversity.
[50] Despite the decline in sales, the company`s balance sheet assets continued to grow. As a result, sales of Coca-Cola`s assets have declined significantly in recent years.
CONTACT US
VN
EN