Do Coca-Cola's (NYSE:KO) Earnings Warrant Your Attention?

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Coca-Cola (NYSE:KO). Now, I’m not saying that the stock is necessarily undervalued today; but I can’t shake an appreciation for the profitability of the business itself. In comparison, loss making companies act like a sponge for capital – but unlike such a sponge they do not always produce something when squeezed.” data-reactid=”29″ type=”text”>In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Coca-Cola (NYSE:KO). Now, I’m not saying that the stock is necessarily undervalued today; but I can’t shake an appreciation for the profitability of the business itself. In comparison, loss making companies act like a sponge for capital – but unlike such a sponge they do not always produce something when squeezed.

View our latest analysis for Coca-Cola ” data-reactid=”30″ type=”text”> View our latest analysis for Coca-Cola

How Quickly Is Coca-Cola Increasing Earnings Per Share?

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Coca-Cola’s EBIT margins are flat but, of some concern, its revenue is actually down. Suffice it to say that is not a great sign of growth.

You can take a look at the company’s revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

earnings-and-revenue-history

interactive visualization of Coca-Cola’s forecast profits?” data-reactid=”51″ type=”text”>In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Coca-Cola’s forecast profits?

Are Coca-Cola Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$203b company like Coca-Cola. But we are reassured by the fact they have invested in the company. Indeed, they have a glittering mountain of wealth invested in it, currently valued at US$1.5b. This suggests to me that leadership will be very mindful of shareholders’ interests when making decisions!

Should You Add Coca-Cola To Your Watchlist?

3 warning signs for Coca-Cola (2 can’t be ignored!) that you should be aware of before investing here.” data-reactid=”55″ type=”text”>Given my belief that share price follows earnings per share you can easily imagine how I feel about Coca-Cola’s strong EPS growth. Further, the high level of insider ownership impresses me, and suggests that I’m not the only one who appreciates the EPS growth. Fast growth and confident insiders should be enough to warrant further research. So the answer is that I do think this is a good stock to follow along with. We should say that we’ve discovered 3 warning signs for Coca-Cola (2 can’t be ignored!) that you should be aware of before investing here.

a free list of them here.” data-reactid=”56″ type=”text”>Of course, you can do well (sometimes) buying stocks that are not growing earnings and do not have insiders buying shares. But as a growth investor I always like to check out companies that do have those features. You can access a free list of them here.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.” data-reactid=”58″ type=”text”>

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.