Buffett Highlights Coca-Cola and American Express in 2022 Letter
Written by Emily J. Thompson, Senior Investment Analyst
Source: NASDAQ.COM
- Significant Dividend Growth: Buffett noted that Coca-Cola's dividends have surged from $75 million to $704 million over the past 28 years, indicating strong dividend growth potential that is likely to continue, thereby enhancing Berkshire's investment returns.
- Enhanced Return on Investment: The yield on cost for Coca-Cola has risen to nearly 50% from Buffett's initial investment, highlighting exceptional performance against the S&P 500's average annual return of 10.5% over the past 70 years.
- Rapid Growth of American Express: Since Buffett's mention, American Express has increased its dividends by 91%, with annual payouts rising from $302 million to $577 million in 2022, and while the current yield is below 1%, strong earnings growth supports future dividend increases.
- Sustained Profitability: Both Coca-Cola and American Express demonstrate robust profitability, with Coca-Cola achieving a 30% year-over-year growth last quarter and American Express reporting a 19% annual earnings increase, providing a solid foundation for future dividend growth.
Analyst Views on KO
Wall Street analysts forecast KO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KO is 79.33 USD with a low forecast of 71.00 USD and a high forecast of 85.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
13 Buy
1 Hold
0 Sell
Strong Buy
Current: 72.560
Low
71.00
Averages
79.33
High
85.00
Current: 72.560
Low
71.00
Averages
79.33
High
85.00
About KO
The Coca-Cola Company is a beverage company. The Company's segments include Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Global Ventures; and Bottling Investments. It sells multiple brands across several beverage categories worldwide. Its portfolio of sparkling soft drink brands includes Coca-Cola, Sprite and Fanta. Its water, sports, coffee and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa, Georgia, Fuze Tea, Gold Peak and Ayataka. Its juice, value-added dairy and plant-based beverage brands include Minute Maid, Simply, innocent, Del Valle, fairlife and AdeS. It operates in two lines of business: concentrate operations and finished product operations. Its concentrate operations sell beverage concentrates, syrups, including fountain syrups, and certain finished beverages to authorized bottling operations. Its finished product operations sell sparkling soft drinks and a variety of other finished beverages.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
