Coca Cola (US30: KO) is set to release earnings on Tuesday as the Dow Jones Industrial Index closed above 50,000 for the first time.
KO – Weekly Chart
KO shares have surged from lows near $67.00, mounting a five-week rally to $79.00. Bip buyers may have more luck following the rotation trade out of tech stocks.
The US 30 snapped a three-week losing streak to close above the milestone number for the first time on Friday.
Coca Cola is one of the constituents in the 30 largest industrial stocks, and the beverage and snacks giant will report earnings on Tuesday, ahead of the U.S. market open. With weakness in tech stocks, a rotation has been happening into consumer staple companies, with KO shares gaining 13% since the start of the year. Rival PepsiCo reported better-than-expected earnings last week and has also seen its stock price surge in recent weeks.
Since the last reporting results in October, Coca-Cola has announced a plan to transition to a new CEO. Company veteran COO Henrique Braun is set to replace James Quincey after a nine-year stint at the top position. The company’s revenue is expected to be $12 billion in the fourth quarter, up 4% year over year. Adjusted earnings per share are expected to grow by 2 cents to $0.57, according to estimates.
Coca-Cola has raised its dividend for 63 consecutive years and is widely expected to announce a 64th increase this month. However, in recent years, dividend increases have struggled to keep pace with inflation, while the company has played a role in rising food and beverage prices worldwide.
Improved earnings, higher operating margins, and share buybacks could see the largest dividend increase since 2007. Among more than 50,000 publicly traded companies globally, Coke is one of only 56 that have increased dividends for more than 50 years.
