Coca Cola Co (NYSE:KO)

CAPS Rating: 4 out of 5

The world's leading soft-drink company, Coca-Cola's fountain includes everything from Coke to Poweraid to Dasani water.

Recs

9
Player Avatar HarryCarysGhost (99.69) Submitted: 6/27/2011 8:28:07 PM : Outperform Start Price: $30.08 KO Score: -17.28

http://caps.fool.com/Blogs/new-stock-for-the-port/604364.Okay here we go. $500 initial purchesd, I'll have to wait for the check to clear to see my initial purchase price.This will be an ongoing pitch, should be interesting to see where I'm at in twenty years.

Report this Post 61 Replies
Member Avatar BuffettJunior1 (96.90) Submitted: 6/28/2011 3:15:21 PM
Recs: 3

If you keep buying more shares every year and reinvesting your dividends then you should do very good in the long run.

I would love to own this stock, however, I will wait until its trading at a bigger discount. Right now its trading at a 20% discount to its intrinsic value. For me, I need at least a 50% or greater discount before I buy.

Good luck! I hope it works out for you.

Member Avatar concealedweapont (< 20) Submitted: 7/5/2011 3:34:35 AM
Recs: 2

all good ko is a king stock buy buy buy brother

Member Avatar concealedweapont (< 20) Submitted: 7/5/2011 3:37:18 AM
Recs: 2

i feel your making a mistake. main thing i learned from buffett buy the great companies even when they arent at a discount value. if you havent, read buffettology interpretations of financial statements. he talks how a mistake of graham was only buying good companies at a discount and not willing to at fair value

Member Avatar HarryCarysGhost (99.69) Submitted: 7/9/2011 11:29:38 AM
Recs: 2

I am the proud owner of 7.09593 shares of the Coca- Cola company in a dividend reinvestment plan.

Member Avatar kpoeppel (< 20) Submitted: 7/12/2011 11:47:16 AM
Recs: 3

HOLY COW!

(sorry...couldn't resist...)

Member Avatar HarryCarysGhost (99.69) Submitted: 7/12/2011 9:33:44 PM
Recs: 1

Lol! kpoeppel, you made my day with that comment.

Member Avatar kpoeppel (< 20) Submitted: 7/13/2011 3:15:56 PM
Recs: 2

Glad to give you a laugh!

I own some shares of this company too. It's another one of those brands...and companies...that will probably outlive me.

Member Avatar blesto (32.17) Submitted: 7/15/2011 7:58:29 AM
Recs: 2

Drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip, drip,...

http://wiki.fool.com/Fool_DRIP_Portfolio

Member Avatar HarryCarysGhost (99.69) Submitted: 7/15/2011 7:28:43 PM
Recs: 1

Hey blesto, thanks for the link. what caught my eye was no new activity since Oct 2010. Seems like they're waiting for something before the final grand is deployed. Smart move.

I'm just going to add whenever I can not really focusing on price.

Member Avatar blesto (32.17) Submitted: 7/15/2011 7:55:15 PM
Recs: 1

And in the meantime their dividends are being automatically reinvested...Drip, drip, drip, drip...

Member Avatar truthisntstupid (85.01) Submitted: 7/19/2011 7:31:07 PM
Recs: 1

Hi HCG!
So did the plan change any since I copied off my prospectus for you awhile back?
Good pick!

Member Avatar HarryCarysGhost (99.69) Submitted: 7/20/2011 6:25:03 PM
Recs: 1

Hey Truth!
Still on course with the plan, thanx for the info that was really helpful.

What were looking at right now is $500.00 Transaction Amount
$13.21 Deduction Amount
$486.79 Net Amount
$68.601300 Price Per Share/Unit
7.095930 Total Shares

I'm going to do another deposit before the first Drip, so I'm excited to see what happens with my cost basis.

Obviously it will start out small, but I believe in building mountains out of molehills.

Member Avatar truthisntstupid (85.01) Submitted: 7/20/2011 6:44:47 PM
Recs: 0

I'm giving a lot of thought to overturning my decision to stop using DSPPs. They really do make investing so easy, don't they? And many plans have even smaller or NO transaction fees on the buy side. (SCG, and many others). Your fees included an enrollment fee - a one-time charge. Subsequent additional cash purchases, I'm sure you've found, are made with negligible fees (I don't remember, I'm not sure about KO). GE pays ALL transaction costs the last I knew - with a minimum initial investment of only $10! (At least on the buy side).

Member Avatar HarryCarysGhost (99.69) Submitted: 7/20/2011 8:40:09 PM
Recs: 1

Yep, it is really easy.

I'm comfortable with the commisions I'm paying at this time. (it'll be neglible real quick ;)

As far as GE goes, Jeff Immulet has continually lied to me so that was not the horse that I wanted to saddle up with.

Long Live Coke.

Member Avatar truthisntstupid (85.01) Submitted: 7/20/2011 10:25:22 PM
Recs: 0

Harry
I wasn't trying to sell anyone on GE. Although I've made GE a CAPS pick, I wouldn't invest in it, either. All I'm saying is that when you start looking around at DSPP prospectuses (prospecti?) you'll find that some charge fees so small they actually really aren't worth worrying about.
I STILL have, in a filing cabinet behind me, the DSPP prospectuses for over 100 companies.
KO is one of many.

Member Avatar HarryCarysGhost (99.69) Submitted: 9/16/2011 11:15:20 PM
Recs: 1

Got my deposit in before the Ex-date.

Had 7.09530 shares.

optional cash purchase- $150

Transaction fee- $3.06

Share posistion- 9.176022

This is so sweet.

Member Avatar truthisntstupid (85.01) Submitted: 9/18/2011 7:14:23 PM
Recs: 1

Hi Harry!

You know, in some blogs I wrote some commenters made inferences that they didn't see how I made money with such small purchases because of transaction fees.
It was like they didn't even read the blog.
Transaction fees aren't very significant with drips...are they?
I'm probably going back to drips. I have to start ordering new prospectuses for the ones I like.
Drips work. Ka-CHING!

Member Avatar HarryCarysGhost (99.69) Submitted: 9/19/2011 12:42:59 AM
Recs: 1

Hi Truth,

This is great, soon I'll be buying shares with my first divi without lifting a finger.

Let me know which prospeti? you order.

Cheers.

Member Avatar HarryCarysGhost (99.69) Submitted: 10/4/2011 8:05:56 PM
Recs: 0

Ok, the moment we've all been waiting for- the first drip (maybe its just me, but work with me people :)

Had 9.176022 shrs.
Now have 9.237905.

Booyah!!!!

.061883 shrs without lifting a finger. (I missed the ex date on the add, gotta make sure I don't cut it that close next qtr)

I know this does'nt seem like much, (wait for it)

Bonus, while every one else is worried about Mr Market and greece (seriously, greece?) I sleep well at night while implementing my simple plan.
Cheers.

Member Avatar HarryCarysGhost (99.69) Submitted: 10/13/2011 10:38:47 PM
Recs: 0

Just for fun I wanted to see what the results would be after 20 yrs if I had roughly enough shares to buy a whole share every qtr.
For this study we must assume Coke is stuck in a vaccuum and the share price never changes and the dividend remains the same-

You want to know how your yield on cost and income will grow if you bought 138 shares of a $65 stock for a total investment cost of $8970. Your stock started with a 2.80% yield and has an annual dividend growth rate of 0%. You plan to hold this investment for 20 years and reinvest the dividends.

This will be compounded quarterly assuming your stock's yield and yield growth are spaced evenly over the course of a year.

With ReinvestmentQuarter Month Income Holdings Value
1 1 $62.79 $9032.79
1 2 $63.23 $9096.02
1 3 $63.67 $9159.69
1 4 $64.12 $9223.81
Year 1 Summary: Total Income (Reinvested): $189.69. Yield on Cost: 2.11%
Year Quarter Income Holdings Value
2 5 $64.57 $9288.38
2 6 $65.02 $9353.39
2 7 $65.47 $9418.87
2 8 $65.93 $9484.80
Year 2 Summary: Total Income (Reinvested): $195.06. Yield on Cost: 2.17%
Year Quarter Income Holdings Value
3 9 $66.39 $9551.19
3 10 $66.86 $9618.05
3 11 $67.33 $9685.38
3 12 $67.80 $9753.18
Year 3 Summary: Total Income (Reinvested): $200.58. Yield on Cost: 2.24%
Year Quarter Income Holdings Value
4 13 $68.27 $9821.45
4 14 $68.75 $9890.20
4 15 $69.23 $9959.43
4 16 $69.72 $10029.15
Year 4 Summary: Total Income (Reinvested): $206.25. Yield on Cost: 2.30%
Year Quarter Income Holdings Value
5 17 $70.20 $10099.35
5 18 $70.70 $10170.05
5 19 $71.19 $10241.24
5 20 $71.69 $10312.92
Year 5 Summary: Total Income (Reinvested): $212.09. Yield on Cost: 2.36%
Year Quarter Income Holdings Value
6 21 $72.19 $10385.12
6 22 $72.70 $10457.81
6 23 $73.20 $10531.02
6 24 $73.72 $10604.73
Year 6 Summary: Total Income (Reinvested): $218.09. Yield on Cost: 2.43%
Year Quarter Income Holdings Value
7 25 $74.23 $10678.97
7 26 $74.75 $10753.72
7 27 $75.28 $10828.99
7 28 $75.80 $10904.80
Year 7 Summary: Total Income (Reinvested): $224.26. Yield on Cost: 2.50%
Year Quarter Income Holdings Value
8 29 $76.33 $10981.13
8 30 $76.87 $11058.00
8 31 $77.41 $11135.41
8 32 $77.95 $11213.35
Year 8 Summary: Total Income (Reinvested): $230.61. Yield on Cost: 2.57%
Year Quarter Income Holdings Value
9 33 $78.49 $11291.85
9 34 $79.04 $11370.89
9 35 $79.60 $11450.49
9 36 $80.15 $11530.64
Year 9 Summary: Total Income (Reinvested): $237.13. Yield on Cost: 2.64%
Year Quarter Income Holdings Value
10 37 $80.71 $11611.35
10 38 $81.28 $11692.63
10 39 $81.85 $11774.48
10 40 $82.42 $11856.90
Year 10 Summary: Total Income (Reinvested): $243.84. Yield on Cost: 2.72%
Year Quarter Income Holdings Value
11 41 $83.00 $11939.90
11 42 $83.58 $12023.48
11 43 $84.16 $12107.64
11 44 $84.75 $12192.40
Year 11 Summary: Total Income (Reinvested): $250.74. Yield on Cost: 2.80%
Year Quarter Income Holdings Value
12 45 $85.35 $12277.75
12 46 $85.94 $12363.69
12 47 $86.55 $12450.24
12 48 $87.15 $12537.39
Year 12 Summary: Total Income (Reinvested): $257.84. Yield on Cost: 2.87%
Year Quarter Income Holdings Value
13 49 $87.76 $12625.15
13 50 $88.38 $12713.52
13 51 $88.99 $12802.52
13 52 $89.62 $12892.14
Year 13 Summary: Total Income (Reinvested): $265.13. Yield on Cost: 2.96%
Year Quarter Income Holdings Value
14 53 $90.24 $12982.38
14 54 $90.88 $13073.26
14 55 $91.51 $13164.77
14 56 $92.15 $13256.92
Year 14 Summary: Total Income (Reinvested): $272.63. Yield on Cost: 3.04%
Year Quarter Income Holdings Value
15 57 $92.80 $13349.72
15 58 $93.45 $13443.17
15 59 $94.10 $13537.27
15 60 $94.76 $13632.03
Year 15 Summary: Total Income (Reinvested): $280.35. Yield on Cost: 3.13%
Year Quarter Income Holdings Value
16 61 $95.42 $13727.46
16 62 $96.09 $13823.55
16 63 $96.76 $13920.32
16 64 $97.44 $14017.76
Year 16 Summary: Total Income (Reinvested): $288.28. Yield on Cost: 3.21%
Year Quarter Income Holdings Value
17 65 $98.12 $14115.88
17 66 $98.81 $14214.69
17 67 $99.50 $14314.20
17 68 $100.20 $14414.40
Year 17 Summary: Total Income (Reinvested): $296.44. Yield on Cost: 3.30%
Year Quarter Income Holdings Value
18 69 $100.90 $14515.30
18 70 $101.61 $14616.90
18 71 $102.32 $14719.22
18 72 $103.03 $14822.26
Year 18 Summary: Total Income (Reinvested): $304.83. Yield on Cost: 3.40%
Year Quarter Income Holdings Value
19 73 $103.76 $14926.01
19 74 $104.48 $15030.49
19 75 $105.21 $15135.71
19 76 $105.95 $15241.66
Year 19 Summary: Total Income (Reinvested): $313.45. Yield on Cost: 3.49%
Year Quarter Income Holdings Value
20 77 $106.69 $15348.35
20 78 $107.44 $15455.79
20 79 $108.19 $15563.98
20 80 $108.95 $15672.93
Year 20 Summary: Total Income (Reinvested): $322.32. Yield on Cost: 3.59%

You started with $8970.00 and ended up with $15672.93 for a total gain of 174.73%. This was over 20 years so that makes your average annual gain 8.74%.

Hmmm, kinda makes you wonder what the results would be with an ever growing dividend, which KO has done for like FOREVER!

Member Avatar HarryCarysGhost (99.69) Submitted: 10/13/2011 11:04:30 PM
Recs: 0

Dividends
Declared Ex-Date Record Payable Amount Type
07/21/11 09/13/11 09/15/11 10/01/11 $0.47 Regular Cash
04/28/11 06/13/11 06/15/11 07/01/11 $0.47 Regular Cash
02/17/11 03/11/11 03/15/11 04/01/11 $0.47 Regular Cash
10/21/10 11/29/10 12/01/10 12/15/10 $0.44 Regular Cash
07/22/10 09/13/10 09/15/10 10/01/10 $0.44 Regular Cash
04/22/10 06/11/10 06/15/10 07/01/10 $0.44 Regular Cash
02/18/10 03/11/10 03/15/10 04/01/10 $0.44 Regular Cash
10/22/09 11/27/09 12/01/09 12/15/09 $0.41 Regular Cash
07/23/09 09/11/09 09/15/09 10/01/09 $0.41 Regular Cash
04/23/09 06/11/09 06/15/09 07/01/09 $0.41 Regular Cash
02/19/09 03/11/09 03/15/09 04/01/09 $0.41 Regular Cash
10/16/08 11/26/08 12/01/08 12/15/08 $0.38 Regular Cash
07/17/08 09/11/08 09/15/08 10/01/08 $0.38 Regular Cash
04/17/08 06/11/08 06/15/08 07/01/08 $0.38 Regular Cash
02/21/08 03/12/08 03/15/08 04/01/08 $0.38 Regular Cash
10/18/07 11/28/07 12/01/07 12/15/07 $0.34 Regular Cash
07/19/07 09/13/07 09/15/07 10/01/07 $0.34 Regular Cash
04/19/07 06/13/07 06/15/07 07/01/07 $0.34 Regular Cash
02/15/07 03/13/07 03/15/07 04/01/07 $0.34 Regular Cash
10/19/06 11/29/06 12/01/06 12/15/06 $0.31 Regular Cash
07/20/06 09/13/06 09/15/06 10/01/06 $0.31 Regular Cash
04/20/06 06/13/06 06/15/06 07/01/06 $0.31 Regular Cash
02/16/06 03/13/06 03/15/06 04/01/06 $0.31 Regular Cash
10/20/05 11/29/05 12/01/05 12/15/05 $0.28 Regular Cash
07/21/05 09/13/05 09/15/05 10/01/05 $0.28 Regular Cash
04/20/05 06/13/05 06/15/05 07/01/05 $0.28 Regular Cash
02/17/05 03/11/05 03/15/05 04/01/05 $0.28 Regular Cash
10/21/04 11/29/04 12/01/04 12/15/04 $0.25 Regular Cash
07/22/04 09/13/04 09/15/04 10/01/04 $0.25 Regular Cash
04/21/04 06/11/04 06/15/04 07/01/04 $0.25 Regular Cash
02/19/04 03/12/04 03/15/04 04/01/04 $0.25 Regular Cash
10/16/03 11/26/03 12/01/03 12/15/03 $0.22 Regular Cash
07/17/03 09/11/03 09/15/03 10/01/03 $0.22 Regular Cash
04/16/03 06/11/03 06/15/03 07/01/03 $0.22 Regular Cash
02/20/03 03/12/03 03/15/03 04/01/03 $0.22 Regular Cash
10/17/02 11/27/02 12/01/02 12/15/02 $0.20 Regular Cash
07/18/02 09/11/02 09/15/02 10/01/02 $0.20 Regular Cash
04/17/02 06/13/02 06/15/02 07/01/02 $0.20 Regular Cash
02/21/02 03/13/02 03/15/02 04/01/02 $0.20 Regular Cash
10/17/01 11/29/01 12/01/01 12/15/01 $0.18 Regular Cash
07/19/01 09/13/01 09/15/01 10/01/01 $0.18 Regular Cash
04/17/01 06/13/01 06/15/01 07/01/01 $0.18 Regular Cash
02/15/01 03/13/01 03/15/01 04/01/01 $0.18 Regular Cash
10/18/00 11/29/00 12/01/00 12/15/00 $0.17 Regular Cash
07/20/00 09/13/00 09/15/00 10/01/00 $0.17 Regular Cash
04/19/00 06/13/00 06/15/00 07/01/00 $0.17 Regular Cash
02/17/00 03/13/00 03/15/00 04/01/00 $0.17 Regular Cash
10/21/99 11/26/99 12/01/99 12/15/99 $0.16 Regular Cash
07/15/99 09/10/09 09/15/99 10/01/99 $0.16 Regular Cash
04/21/99 06/10/99 06/15/99 07/01/99 $0.16 Regular Cash
02/18/99 03/10/99 03/15/99 04/01/99 $0.16 Regular Cash
10/15/98 11/27/98 12/01/98 12/15/98 $0.15 Regular Cash
07/16/98 09/11/98 09/15/98 10/01/98 $0.15 Regular Cash
04/15/98 06/11/98 06/15/98 07/01/98 $0.15 Regular Cash
02/19/98 03/11/98 03/15/98 04/01/98 $0.15 Regular Cash
10/16/97 11/26/97 12/01/97 12/15/97 $0.14 Regular Cash
07/17/97 09/11/97 09/15/97 10/01/97 $0.14 Regular Cash
04/17/97 06/11/97 06/15/97 07/01/97 $0.14 Regular Cash
02/20/97 03/12/97 03/15/97 04/01/97 $0.14 Regular Cash

Member Avatar HarryCarysGhost (99.69) Submitted: 10/13/2011 11:27:29 PM
Recs: 0

To calculate a dividend’s growth rate you need to get the dividend history. You can usually get this information from the investor relations page of the company you are researching. Once you get a list of the previous years dividends you can calculate the growth rate very easily.

As an example, if this was the previous years dividends:
2000: $1
2001: $1.10
2002: $1.25

You would say that 2001 had a 10% increase (1.10-1.00=.10, 10/100=10%) and 2002 had a 13.6% increase (1.25-1.10=.15 and 15/110=13.6%).

So average those two out and you get a dividend growth rate of 11.8% over the last two years.

Member Avatar Momentum21 (95.63) Submitted: 10/14/2011 12:30:06 AM
Recs: 1

when in doubt, pull the trigger on some KO...booyah

Member Avatar HarryCarysGhost (99.69) Submitted: 10/15/2011 12:17:50 PM
Recs: 0

@momentum21- Booyah indeed!

Dividend growth rate over 5 yrs-
2011- .47 / .03 = 15.7%
2010- .44/ .03= 14.7%
2009- .41/.03= 13.7%
2008- .38/ .03= 12.7%
2007- ..34/ .04= 8.5%

So 15.7 + 14.7 + 13.7 + 12.7 + 8.5= 65.3

65.3/ 5= 13.1%

I think my math is correct and all I can say is Holy Cow that is a huge number.

Member Avatar HarryCarysGhost (99.69) Submitted: 10/15/2011 12:51:35 PM
Recs: 0

Ok revised #'s time-
Quarterly Compounded Dividend Calculator
You want to know how your yield on cost and income will grow if you bought 138 shares of a $65 stock for a total investment cost of $8970. Your stock started with a 2.8% yield and has an annual dividend growth rate of 13.1%. You plan to hold this investment for 20 years and reinvest the dividends.

This will be compounded quarterly assuming your stock's yield and yield growth are spaced evenly over the course of a year.

With ReinvestmentQuarter Month Income Holdings Value
1 1 $62.79 $9032.79
1 2 $65.30 $9098.09
1 3 $67.93 $9166.02
1 4 $70.67 $9236.69
Year 1 Summary: Total Income (Reinvested): $196.02. Yield on Cost: 2.19%
Year Quarter Income Holdings Value
2 5 $73.55 $9310.24
2 6 $76.57 $9386.81
2 7 $79.72 $9466.53
2 8 $83.03 $9549.57
Year 2 Summary: Total Income (Reinvested): $229.84. Yield on Cost: 2.56%
Year Quarter Income Holdings Value
3 9 $86.51 $9636.07
3 10 $90.15 $9726.22
3 11 $93.97 $9820.19
3 12 $97.99 $9918.18
Year 3 Summary: Total Income (Reinvested): $270.62. Yield on Cost: 3.02%
Year Quarter Income Holdings Value
4 13 $102.21 $10020.38
4 14 $106.64 $10127.02
4 15 $111.30 $10238.33
4 16 $116.21 $10354.54
Year 4 Summary: Total Income (Reinvested): $320.15. Yield on Cost: 3.57%
Year Quarter Income Holdings Value
5 17 $121.38 $10475.92
5 18 $126.83 $10602.75
5 19 $132.57 $10735.31
5 20 $138.62 $10873.93
Year 5 Summary: Total Income (Reinvested): $380.77. Yield on Cost: 4.24%
Year Quarter Income Holdings Value
6 21 $145.01 $11018.94
6 22 $151.75 $11170.69
6 23 $158.88 $11329.57
6 24 $166.42 $11495.99
Year 6 Summary: Total Income (Reinvested): $455.64. Yield on Cost: 5.08%
Year Quarter Income Holdings Value
7 25 $174.39 $11670.38
7 26 $182.84 $11853.22
7 27 $191.78 $12045.00
7 28 $201.27 $12246.27
Year 7 Summary: Total Income (Reinvested): $549.01. Yield on Cost: 6.12%
Year Quarter Income Holdings Value
8 29 $211.33 $12457.61
8 30 $222.02 $12679.63
8 31 $233.38 $12913.00
8 32 $245.46 $13158.46
Year 8 Summary: Total Income (Reinvested): $666.73. Yield on Cost: 7.43%
Year Quarter Income Holdings Value
9 33 $258.32 $13416.78
9 34 $272.01 $13688.79
9 35 $286.62 $13975.40
9 36 $302.20 $14277.60
Year 9 Summary: Total Income (Reinvested): $816.94. Yield on Cost: 9.11%
Year Quarter Income Holdings Value
10 37 $318.85 $14596.45
10 38 $336.64 $14933.09
10 39 $355.68 $15288.78
10 40 $376.08 $15664.86
Year 10 Summary: Total Income (Reinvested): $1011.17. Yield on Cost: 11.27%
Year Quarter Income Holdings Value
11 41 $397.95 $16062.81
11 42 $421.43 $16484.24
11 43 $446.65 $16930.89
11 44 $473.77 $17404.66
Year 11 Summary: Total Income (Reinvested): $1266.03. Yield on Cost: 14.11%
Year Quarter Income Holdings Value
12 45 $502.98 $17907.65
12 46 $534.47 $18442.11
12 47 $568.44 $19010.56
12 48 $605.16 $19615.71
Year 12 Summary: Total Income (Reinvested): $1605.89. Yield on Cost: 17.90%
Year Quarter Income Holdings Value
13 49 $644.87 $20260.58
13 50 $687.88 $20948.47
13 51 $734.53 $21683.00
13 52 $785.19 $22468.19
Year 13 Summary: Total Income (Reinvested): $2067.28. Yield on Cost: 23.05%
Year Quarter Income Holdings Value
14 53 $840.27 $23308.45
14 54 $900.24 $24208.69
14 55 $965.63 $25174.32
14 56 $1037.03 $26211.35
Year 14 Summary: Total Income (Reinvested): $2706.13. Yield on Cost: 30.17%
Year Quarter Income Holdings Value
15 57 $1115.11 $27326.46
15 58 $1200.63 $28527.09
15 59 $1294.43 $29821.52
15 60 $1397.48 $31218.99
Year 15 Summary: Total Income (Reinvested): $3610.17. Yield on Cost: 40.25%
Year Quarter Income Holdings Value
16 61 $1510.88 $32729.87
16 62 $1635.87 $34365.74
16 63 $1773.89 $36139.63
16 64 $1926.55 $38066.18
Year 16 Summary: Total Income (Reinvested): $4920.64. Yield on Cost: 54.86%
Year Quarter Income Holdings Value
17 65 $2095.71 $40161.89
17 66 $2283.50 $42445.38
17 67 $2492.37 $44937.75
17 68 $2725.13 $47662.88
Year 17 Summary: Total Income (Reinvested): $6871.57. Yield on Cost: 76.61%
Year Quarter Income Holdings Value
18 69 $2985.05 $50647.94
18 70 $3275.89 $53923.82
18 71 $3601.99 $57525.82
18 72 $3968.44 $61494.26
Year 18 Summary: Total Income (Reinvested): $9862.93. Yield on Cost: 109.95%
Year Quarter Income Holdings Value
19 73 $4381.14 $65875.40
19 74 $4846.98 $70722.38
19 75 $5374.03 $76096.41
19 76 $5971.76 $82068.17
Year 19 Summary: Total Income (Reinvested): $14602.15. Yield on Cost: 162.79%
Year Quarter Income Holdings Value
20 77 $6651.33 $88719.50
20 78 $7425.88 $96145.38
20 79 $8310.98 $104456.36
20 80 $9325.11 $113781.47
Year 20 Summary: Total Income (Reinvested): $22388.19. Yield on Cost: 249.59%

You started with $8970.00 and ended up with $113781.47 for a total gain of 1268.47%. This was over 20 years so that makes your average annual gain 63.42%

WOW!, JUST WOW!...

Member Avatar blesto (32.17) Submitted: 10/20/2011 5:38:58 AM
Recs: 1

Wow is right!
If you look at their 5yr dividend growth rate http://caps.fool.com/Ticker/KO/Ratios.aspx?source=icasittab0000007 it's a more conservative 8.65% that you should use for your 20 year calculation. Which I'm sure would still be impressive. Not to mention every time you add cash to it will boost it even more.
Do you plan to add more cash above the dividend on a regular basis? Now that would make a very interesting 20 year calculation. :-)

Member Avatar HarryCarysGhost (99.69) Submitted: 10/21/2011 12:25:35 AM
Recs: 0

Hey blesto,

Hmm, now I'm totally confused.
TMF lists the 5yr dgr at 8.65%
Rueters lists it at 9.46%
I thought I had the math right but when I look it up on the web I find diferent formulas to calculate the growth rate.

So far I've been true to my plan of adding $50 every mnth.

One check every qtr for $150
So $600 pr/yr, for 20 yrs= 12,000 added to initial $500 investment.

Commisions are neglible.
We might be dealing with an algebraric formula.

And all I can say about that is-
truthisntstupid...

Help, I sucked at algebra.

Member Avatar truthisntstupid (85.01) Submitted: 10/22/2011 2:12:15 PM
Recs: 1

haha I'll look at it in awhile, Harry...I just got off work!

Member Avatar truthisntstupid (85.01) Submitted: 10/22/2011 2:19:35 PM
Recs: 1

Been up since 3AM...might need a nap before I can focus on those numbers...

Member Avatar HarryCarysGhost (99.69) Submitted: 10/22/2011 4:30:08 PM
Recs: 0

Thanks Truth,

You totally rock! And get some sleep because my head was about to explode trying to figure it out :)

Member Avatar truthisntstupid (85.01) Submitted: 10/23/2011 5:40:36 PM
Recs: 0

Haven't forgotten you, Harry...
Just got home from an 11-hour day, been up since 3AM again. I'm having trouble understanding what you're trying to figure out. At one point (above) you assumed KO was stuck in a vacuum with zero dividend growth and started with 138 shares...but I think you've moved on to trying to calculate the dividend growth rate based on your figures from 6 comments up ending with "Wow! Just wow..."
I can do that but I'm not the math wiz you think I am. I just have a financial calculator with the time value of money functions programmed in and know how to use it...

Member Avatar truthisntstupid (85.01) Submitted: 10/23/2011 5:42:13 PM
Recs: 0

It's called a Texas Instruments BA-II.

Member Avatar truthisntstupid (85.01) Submitted: 10/23/2011 5:49:05 PM
Recs: 0

I COULD dig out my intermediate accounting textbook and actually use the formula that's programmed into the calculator, but I'd have to look it up. Then, there's the problem I have with not knowing how to type in exponents so that they show up properly. So I just use my trusty ol' BA-II. I can figure anything you want...but I can't show the formula because I don't know how to make exponents show up properly.

Member Avatar HarryCarysGhost (99.69) Submitted: 10/23/2011 7:51:28 PM
Recs: 0

Thanks truth,

What I really wanted to know is what the proper 5 yr dividend growth rate for Coke would be?
But blestos question about adding to the divi really interested me.

Can the BA-ll do something with the numbers I put up in the comment that ends in- "help I sucked at algebra"?

Member Avatar truthisntstupid (85.01) Submitted: 10/24/2011 4:57:46 AM
Recs: 1

Yeah! I will when I get home from work.

Member Avatar truthisntstupid (85.01) Submitted: 10/24/2011 6:55:22 PM
Recs: 0

I'm back, Harry. Let's decide on some basic assumptions.
1) Beginning investment of $500.
2) 2.8% yield, compounded quarterly, assuming KO is stuck in a vacuum with no dividend growth and no change in price as you said in an earlier comment.
3) $150 added every quarter.
4) Number of compounding periods = 80 quarters (20 years)
OK. Using those assumptions, after 20 years you'd have about 260 shares worth $16,886 and be receiving $472/year in dividends.

This the financial calculator did in a few seconds. To figure dividend growth in, I'd have to do a chart or table much like the one you constructed above in an earlier comment. I'm sure you were careful and did the basic math with percentages right, figuring in the growth of the dividend. But you were wondering what the dividend growth rate was, I think.
That I can also figure out pretty quickly using your figures.

Starting with $8970 and ending with $113,781 after 20 years gives you a compound annual growth rate of 12.91%, unless I figure in the $150/quarter you are adding...then it becomes 10.64%.

Hey buddy, that's not bad!

Member Avatar truthisntstupid (85.01) Submitted: 10/24/2011 7:04:11 PM
Recs: 0

The only thing is, in that comment you were just figuring reinvested dividends on 138 shares over 20 years...you weren't figuring in the quarterly payments of $150 too...so let's just figure those in as well...and I come up with a final future value of $168,103 at a compound annual growth rate of 12.91%...

Is this what you wanted?

Member Avatar truthisntstupid (85.01) Submitted: 10/24/2011 7:24:36 PM
Recs: 0

Dividend growth rate over 5 years....
2007..........$0.34
2008..........$0.38........$0.04/$0.34 = 11.66%
2009..........$0.41........$0.03/$0.38 = 7.89%
2010..........$0.44........$0.03/$0.41 = 7.32%
2011...........$0.47........$0.03/$0.44 = 6.82%

The dividend has grown by $0.12 since 2007. $0.12/$0.34 = 35%....compound annual growth rate of the dividend since 2007 is...6.69%.

I wouldn't let this cloud my thinking. There were some bad years recently, you know!

Member Avatar truthisntstupid (85.01) Submitted: 10/24/2011 7:41:33 PM
Recs: 0

OOPS! The dividend has grown by $0.13 since 2007.
$0.13/$0.34 = 38%....compounded annual growth rate of the dividend since 2007 is...still 6.69%. (I did enter the 2007 dividend and the present dividend into my calculator correctly after all.)

Member Avatar truthisntstupid (85.01) Submitted: 10/24/2011 7:44:46 PM
Recs: 0

A Texas Instruments' BA-II financial calculator is a wonderful toy, Harry! You'd probably enjoy it. It only costs about $35...I think. (I've had mine for a long, long, time.)

Member Avatar truthisntstupid (85.01) Submitted: 10/24/2011 8:30:41 PM
Recs: 0

For the $8970 - $113781 gain over 20 years, the percentage I came up with was NOT the dividend growth rate...that was a typo. The 12.91% was the compound annual growth rate which gave you your 1168.46% total gain over 20 years. ($8970 + 1168.46% = $113780)

Member Avatar HarryCarysGhost (99.69) Submitted: 10/24/2011 9:48:52 PM
Recs: 0

Thanks Truth,
(Weird how the div growth rate jumps around from site to site)

I know what I'm asking for on Christmas :)

Member Avatar truthisntstupid (85.01) Submitted: 10/25/2011 3:59:28 PM
Recs: 0

I haven't because I've owned one for around 20 years or more, but try doing a search on it on the 'net and read about how many amazing things you can do with it. I never go anywhere without my BA-II. I can amuse myself for hours with nothing but it. I usually never go anywhere without a book to read should I get stranded or something, but failing that, I ALWAYS have my BA=II.
You can:
Do interest amortization schedules.
Figure out loan payments and how much faster you can pay off a house or loan if you pay "X" amount extra every month.
Compound interest calculations (If I save "X" amount of $$ every month at "Y" interest rate compounded weekly, quarterly, monthly (you name it) how much money will I have in 10 years?
If I put "X" amount of money in a savings account paying "Y" amount of interest compounded monthly, quarterly, (just enter the compounding periods/year) and draw out a certain amount per month (or week, or quarter) how long will my money last? (It will figure the interest on the declining balance.)

Marvelous, marvelous, toy. Love it. Love it a lot.

Member Avatar truthisntstupid (85.01) Submitted: 10/25/2011 4:29:48 PM
Recs: 0

Example: $50/month for 25 years comes to $15,000.
But all you'd have to put in a bank account paying 5% interest compounded quarterly to be able to draw out $50 a month for 25 years is....$8,570.67.
Like I said...I never get tired of playing with it. So if there's anything else you'd like me to plug in and hit "compute" just let me know.

Member Avatar truthisntstupid (85.01) Submitted: 10/25/2011 5:30:23 PM
Recs: 0

And the last comment, by the way, is highly illustrative of exactly why I hate...detest...abhor...Allen Greenspan and this damned artificially-low interest rate crap he started.
Once upon a time, 5% interest rates were the norm for plain old passbook savings accounts.

Member Avatar HarryCarysGhost (99.69) Submitted: 10/26/2011 9:06:01 PM
Recs: 0

I'm actually old enough to remember CD rates in the 9-11%. My Credit Union would routinely pay 3- 4% interest on a regular account. Alas I was also young enough to not have sizable amounts to collect that rate :).,...

God bless dividends.

An aside, I ordered up some prospecti this weekend, should be getting the plans of MO, JNJ, PG, K and ACAS (because that yield is insane, but I need to do more homework seems a bit too much like a bank for my tastes) shortly.
I'll be picking one for my lady and will let you know what I picked.

Cheers.

Member Avatar truthisntstupid (85.01) Submitted: 10/26/2011 11:32:55 PM
Recs: 0

Awesome! They all have good plans. Do you know the minimum initial investment for K is only $50? Minimum for PG is $250 and for MO is $500.
These are ones I remember. Unless, of course, they've changed their required minimums. But I doubt it.

Member Avatar HarryCarysGhost (99.69) Submitted: 1/15/2012 2:11:00 PM
Recs: 0

Hey truth, we decided on which stock my lady will be dripping in... (that sounded kind of dirty :)

First I pitched her on PG, explaining the huge moat of their product lines,and safe divi.
She was lukewarm to that idea.

Then I saw that VZ offers a $250 min. No reinvestment fees.

Of course I was somewhat concerned about the 94% payout ratio 54.92B debt. But when you start looking at cash flow and the deals they have positioning themselves for the future. It's a cash cow.

Heres the conversation that clinched it-

Harry- Honey how about Verizon wireless they offer a drip.
Dutchie- Oooo, I like that much better then that soap company you mentioned. People really like their cell phones.

I can't argue with that kind of logic, it's pretty funny that I spend hours upon hours scouring over stocks and she makes her picks within a minute. (Note- shes never been wrong in the decade I've known her)

Member Avatar truthisntstupid (85.01) Submitted: 1/16/2012 1:22:27 AM
Recs: 0

Hi Harry! VZ had $12,501M in free cash flow in the trailing twelve months. Divide that by the number of shares (2,839M) and you get $4.40/share in free cash flow. Dividend is $2.00/share, which means VZ's dividend only requires 45% of its free cash flow.
To get these figures, go to Morningstar.com, get a quote for VZ, then after it comes up, click on "Key Ratios."
VZ's dividend is very safe! Good pick!

Member Avatar truthisntstupid (85.01) Submitted: 1/16/2012 1:52:03 AM
Recs: 0

According to Morningstar.com, a total of 35 analysts follow VZ and their consensus rating for VZ is"1.6."

Member Avatar truthisntstupid (85.01) Submitted: 1/16/2012 1:52:34 AM
Recs: 0

According to Morningstar.com, a total of 35 analysts follow VZ and their consensus rating for VZ is"1.6."

Member Avatar HarryCarysGhost (99.69) Submitted: 1/19/2012 9:36:52 PM
Recs: 0

Thanks truth I'll have to start using Morningstar. Not the first time Yahoo has given me faulty #'s.
And 1000 thanks for the formula so I can figure it out. Honestly I just stared at the numbers long enough that my gut told me that 94% was wrong.

Some of my best investing ideas come through meditation...;)

Member Avatar truthisntstupid (85.01) Submitted: 1/20/2012 4:04:43 AM
Recs: 0

Harry, 94% is probably right.
It sounds right. VZ's free cash flow, remember, is much, much, higher than its earnings according to Generally Accepted Accounting Principles.
But in VZ's case you're better off relying on the percentage of free cash flow required to cover that dividend. Because VZ operates in such a capital-intensive industry that it will always have mountains of depreciation expense which lowers its earnings according to GAAP. But you know depreciation is a noncash expense.
A person might even wonder how sustainable that is...whether they'll ever reach the point at which much of their equipment is fully depreciated.
But the beauty of a capital-intensive business like VZ or T is that they're constantly having to upgrade and make new investments, new capital expenditures. They're continually booking new accruals and deferrals. That dividend should continue to be safe for many years. Maybe many many years.
I'm assuming you're familiar with free cash flow, and why it's often much higher than earnings.

Member Avatar truthisntstupid (85.01) Submitted: 1/20/2012 4:27:57 AM
Recs: 0

Forgot to mention.
So yes, either one is correct. 94% of GAAP earnings, or 45% of free cash flow.
In VZ or T's case, earnings payout ratio takes a back seat to free cash flow payout as an indicator of dividend safety.

Member Avatar truthisntstupid (85.01) Submitted: 1/20/2012 5:47:45 AM
Recs: 1

So I've nothing at all to do at almost 4AM, because the %#@# Fool refuses to quit posting those damned datahogging videos and the buzz box has once again said "screw you guys! You need to go to bed, anyway!" And I got to thinkin' (always a bad sign) it won't hurt a thing to post a short explanation of the difference between earnings and free cash flow just in case Harry did need one. If you don't need it, you can just ignore it.
Anyway, when humongous companies have to make billions of dollars in capital expenditures, Uncle Sam doesn't let them claim it all as an expense in the year they spent all that money. You see, Uncle Sam knows that money was invested in equipment that will last a long time, benefiting the company for many years.
So what the company is required to do, is to estimate the useful life of the equipment it has spent these billions of dollars on.
Then it divides those billions of dollars it has spent on that equipment by the number of years of useful life it estimates it will get out of it. That's how much a year it can claim as a "depreciation expense" for that equipment.
You see, while the humongous company isn't allowed to claim it all as an expense in the year it spent the money, it does get to allocate a portion of that expense to each year of its useful life. And that's what "depreciation expense" is. Remember - most depreciation isn't really a an expense that they had to come up with money to pay for this year - the cash outflow was in past years.
On the income statement, depreciation may or may not be shown. Sometimes it's lumped in with "Cost Of Goods Sold" or "Cost Of Sales" or whatever. But whether you see it or not, its part of the expenses subtracted in arriving at net income.
Whether you see it on the income statement or not, you'll see it on the Statement Of Cash Flows where they're adding depreciation back to net income as part of coming up with "Cash Flow From Operations."
It must be added back to net income because although it's being claimed as an expense this year, there was no corresponding outflow of cash - this year. The expense (the capital investments) was incurred in past years.
Hope that helps.

Member Avatar HarryCarysGhost (99.69) Submitted: 1/20/2012 8:32:01 PM
Recs: 0

Thanks truth,
Got the prospecti and enrollment plan and I'll be using our last comments as my pitch for VZ :)

Member Avatar truthisntstupid (85.01) Submitted: 1/20/2012 9:03:55 PM
Recs: 0

That's good! I bet it'll be a good one. I'll be the first to rec it.
Harry, was there anything to what you said in comment #16 on my blog? Where did you hear it?

Member Avatar HarryCarysGhost (99.69) Submitted: 1/21/2012 1:21:20 PM
Recs: 0

Just my observations over the years. I'm not going to throw my more credible source under the bus by naming names. (hint) it's someone who posts here and is in the same Fantasy Football league as I.

Much like how I choose my investments, I just read alot from different sources, stare at the ticker with the sound off, drink a sh*tload of beer and through osmosis come to a decision. What I said in comment #16 makes sense and I stand by it until it is debunked.

On a cheerier note-
11.464466 shrs (time for another deposit in KO OH YEAH!!!!!:)

Member Avatar truthisntstupid (85.01) Submitted: 1/21/2012 3:27:00 PM
Recs: 0

That's ok. On another note, they kept the buzz box alive all night last night, so they're doing better.
I clicked on "Contact Us" and sent them these 3 links night before last (the 19th)

http://www.fool.com/investing/general/2012/01/19/will-this-tech-giant-right-the-ship-in-2012.aspx
http://caps.fool.com/Blogs/just-a-coincidence/691932
http://caps.fool.com/Blogs/gross-negligence/452483

Maybe they got the message. Now if they'd just quit with the damned videos, which are useless to people who have no access to decent high-speed internet, they'd make me really happy.

Member Avatar HarryCarysGhost (99.69) Submitted: 1/24/2012 9:04:16 PM
Recs: 0

Blog about Drips on the beta blogs-
http://beta.fool.com/kbdunn9/2012/01/23/drip-or-not-drip/?source=TheMotleyFool

Member Avatar HarryCarysGhost (99.69) Submitted: 2/16/2012 10:56:25 PM
Recs: 0

Here was a very nice blog on Caps-
http://caps.fool.com/Blogs/ko-a-better-long-term/710561

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