The Coca-Cola Company
Coca-Cola: ROI 12%
Projected Growth Rate: 13% for 20 years
This estimate is less than the 15% growth of the last ten years, and is comparable to the 13% growth of the last twenty years and the 13% growth of the last thirty years.
Projected EPS: $17 in 2019
This estimate is based on $1.50 in earnings per share in the next twelve months with growth of 13% per year for 20 years.
P/E Multiple: 30x
This estimate assumes that the average stock, as represented by the S&P500 Index, will sell at 18x earnings. Therefore, at 30x, Coca-Cola is projected to sell at a 2/3 premium to the S&P500 P/E multiple if anything, this is a conservative assumption since Coca-Cola is not just a better than average company, it is a much better company.
Projected Price: 510 in 2019
$17 in earnings per share times a P/E multiple of 30
Current Price: 64
Projected Capital Gain: 11% annually over twenty years
Dividend Yield: 1%
Current dividend of $.65 divided into the current stock price
Projected ROI: 12% over twenty years
The S&P500 Index
S&P500 Index: ROI 8%
Projected Growth Rate: 8% for 20 years
This estimate is based on an assumption of 3% economic growth plus 2% productivity growth plus 3% inflation; 8% has been the historical growth rate, as well.
Projected EPS: $240 in 2019
This estimate is based on $52 in earnings per share in the next year with growth of 8% per year for 20 years.
P/E Multiple: 18x
This estimate that the average stock, as represented by the S&P500 Index, will sell at 18x earnings is based on past history and current interest rates.
Projected Price: 4320 in 2019
$240 in earnings per share times a P/E multiple of 18
Current Price: 1400
Projected Capital Gain: 6% annually over twenty years
Dividend Yield: 2%
Current dividend yield of the S&P500
Projected ROI: 8%
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