KO
The Coca-Cola Company
Consumer Defensive · Beverages - Non-Alcoholic · United States · Stock
Score Breakdown
Scored for Safe Long-Term Investing profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- KO's perfect profitability sub-score of 20.0/20 is the primary driver placing it above the midpoint, reflecting the model's recognition of its industry-leading margin structure derived from the concentrate and franchise model documented in its 10-K filings.
- The financial health sub-score of 14.0/20 contributes meaningfully to the overall score, reflecting adequate leverage management and interest coverage ratios, even as the company carries a large absolute debt load typical of investment-grade consumer staples issuers.
- The growth sub-score of 12.5/20 and momentum sub-score of 11.0/20 keep the overall score from climbing significantly higher, as EDGAR-reported revenue and earnings trends show limited sequential and year-over-year acceleration.
Why Not Higher
- The theme sub-score of 0.0/20 represents a full 20-point ceiling loss, as KO's mature, non-alcoholic beverage business does not qualify for any of the macro theme exposures tracked by the model, making a score above roughly 75 structurally unattainable under the current scoring framework.
- The dividend sub-score of 6.2/20 is the weakest fundamental sub-score in KO's profile and signals that despite a long dividend payment history, the FCF payout ratio and coverage metrics derived from SEC filings are not strong enough to score well, pulling the composite score down materially.
Data Confidence
10 / 10
Very High — full data coverage
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
The Coca-Cola Company is one of the world's largest beverage corporations, operating a vast portfolio of non-alcoholic brands — including Coca-Cola, Sprite, Fanta, Dasani, and Minute Maid — across more than 200 countries through a franchise-based bottling model. The company generates revenue primarily through concentrate sales to bottling partners, finished product sales, and licensing arrangements, which gives it unusually high margins relative to peers who own and operate full production infrastructure. The model scored KO at 59.1/100, reflecting a business with outstanding profitability characteristics (sub-score: 20.0/20) and solid financial health (14.0/20), but constrained by moderate growth dynamics (12.5/20), modest earnings momentum (11.0/20), and a dividend profile (6.2/20) that, while reliable, shows tension between FCF coverage and payout levels. The theme sub-score of 0.0 further caps the total, as KO's mature, defensive business does not align with the macro growth themes the model tracks. The core research tradeoff is between KO's exceptional margin structure and brand durability on one side, and its limited organic growth runway and dividend sustainability metrics on the other — making it a nuanced research candidate rather than a straightforward high-scorer.
Plain English
Coca-Cola is the company behind some of the most recognized drink brands in the world, selling sodas, juices, water, and more in almost every country. The model gave it a 59.1 out of 100, which means it scores well on profitability and financial stability but is held back by slower growth and a dividend profile that raises some questions about cash flow coverage. The Medium risk rating reflects that while KO is a very established business, it carries meaningful debt and faces real-world pressures like currency fluctuations and shifting consumer habits. Researchers looking for steady, defensive exposure may find it worth investigating further, but it is not a top-tier scorer in the model.
Bull Case vs. Bear Case
Bull Case
- KO's profitability sub-score of 20.0/20 — the model's maximum — reflects exceptional net and operating margins enabled by its asset-light concentrate business model, where the company earns high-margin fees without bearing the capital costs of full-scale bottling.
- The financial health sub-score of 14.0/20 indicates that despite carrying significant debt, KO maintains sufficient interest coverage and balance sheet scale to weather economic downturns, which is consistent with its Consumer Defensive sector classification.
- KO's best scoring goal profile is 'safe long-term investing' at 63.2, suggesting the model views its combination of brand durability, dividend history, and margin strength as most relevant for researchers with a long-horizon, lower-volatility orientation.
Bear Case
- The growth sub-score of 12.5/20 indicates that KO's year-over-year revenue, net income, and EPS growth rates are modest, reflecting the structural reality that a mature global beverage leader has limited organic volume expansion opportunities in saturated markets.
- The momentum sub-score of 11.0/20 — measuring quarterly improvement in revenue, earnings, and margins from regulatory filings — suggests that recent operational trends have not shown meaningful sequential acceleration, limiting near-term fundamental upside in the model's view.
- The dividend sub-score of 6.2/20 is the second-lowest sub-score in KO's profile, pointing to concerns around FCF payout ratio and FCF coverage relative to dividends paid, meaning the dividend may be consuming a disproportionate share of free cash flow generation.
What Could Change the Picture
Bullish Triggers
- A demonstrable improvement in free cash flow generation relative to dividend payments — visible in future 10-K filings — would likely lift the dividend sub-score significantly and push the overall model score higher, strengthening the research case for KO.
- Sustained sequential acceleration in quarterly revenue and operating earnings across two or more reporting periods would improve the momentum sub-score from its current 11.0/20, signaling that KO's volume and pricing strategies are gaining traction in its operating data.
Bearish Triggers
- A deterioration in operating margins or net margins in future 10-K filings — driven by input cost inflation, currency headwinds on concentrate revenues, or bottler-related pressures — would erode the 20.0/20 profitability sub-score that is the primary anchor of KO's current score.
- An increase in leverage ratios or a decline in interest coverage as reported in annual filings, potentially from debt-financed acquisitions or shareholder returns, would reduce the financial health sub-score from its current 14.0/20 and weaken the overall research profile.
Red Flags
- The dividend sub-score of 6.2/20 is notably low for a company in the Consumer Defensive sector and suggests the model has identified stress in KO's free cash flow coverage of its dividend obligations, which warrants scrutiny of FCF trends in the 10-K filing.
- A theme sub-score of 0.0/20 confirms that KO has no meaningful exposure to the macro growth themes tracked by the model, meaning its fundamental score ceiling is structurally capped relative to companies in higher-growth sectors.
Risk Profile
Medium RiskThe Medium risk rating for KO reflects a company with exceptional brand and margin stability offset by meaningful balance sheet leverage, significant foreign currency exposure across 200+ country operations, and a dividend structure that the model flags as consuming a high proportion of free cash flow — factors that introduce real fundamental variability even within a defensive sector.
Key Catalysts to Watch
The key factors to monitor in KO's regulatory filings are free cash flow generation trends relative to dividend commitments — which directly affect the lowest-scoring sub-dimension — and any evidence of sequential revenue or earnings margin improvement that would signal a fundamental inflection capable of moving the momentum sub-score upward.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.