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Coca-Cola Raises Dividend, Adds 150M To Share Buyback

Coca-Cola Raises Dividend, Adds 150M To Share Buyback

The Coca-Cola Co (NYSE: KO) announced multiple updates Thursday, including a dividend boost, an incremental buyback authorization and the resignation of a board member.

What Happened

Coca-Cola's board of directors approved a dividend increase of 2.6 percent from 39 cents to 40 cents per common share. On an annualized basis, the company boosted its dividend from $1.56 per share to $1.60 with the first payment payable April 1 to investors of record as of March 15. The dividend increase marks the 57th consecutive annual dividend.

Coca-Cola also authorized a new share repurchase program for an additional 150 million shares of the company's common stock. The program will take affect as soon as the current authorization expires, which allows for 500 millions shares to be repurchased and was approved in 2012.

Richard Daley, a member of Coca-Cola's board since 2011, will not seek reelection at the company's annual meeting in April. Daley served as mayor of Chicago from 1989 to 2011 and serves as executive chairman of Tur Partners LLC, an investment and advisory firm focusing sustainable solutions within the urban environment.

Why It's Important

Coca-Cola's dividend hike and new share buyback authorization follows one of the stock's worst trading sessions in years in reaction to a poor fourth-quarter earnings report. A weak fourth-quarter earnings report was followed up with a cautious guidance for 2019, which had one Street analyst saying its earnings outlook is stuck "in a rut."

Investor reaction to the company's commitment to cash returns through incremental dividends and stock buybacks appears to be positive, with the stock trading higher by 1.22 percent at $55.67 Thursday afternoon.

Related Links:

Why Macquarie Prefers Pepsi Over Coca-Cola

Macquarie: Coca-Cola A Winner With BodyArmor Investment As Pepsi's Gatorade Cedes Share


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