Is Coca-Colas Free Cash Flow Weak?
Apr. 27, 2018 1:23 PM•KO
Summary
Coca-Cola owns a fantastic brand and has tremendous competitive advantages, from a solid reputation to a sprawling distribution network and beyond.
Its free cash flow generation hasn't been that great relative to cash dividends paid, however, and its net debt load is rather sizable.
That free cash flow performance in 2017 came up short in covering annual dividend payments (free cash flow of $5.3 billion and cash dividends paid of $6.3 billion) is noteworthy.
From where we stand, the company’s endeavors to become less capital-intensive haven’t helped free-cash-flow-generating capacity at all, and that's a big red flag for the dividend.
We wonder if the company is trading more on its brand name and reputation than on its actual fundamentals
Is Coca-Cola's Free Cash Flow Weak? - The Coca-Cola Company (NYSE:KO) | Seeking Alpha
