Coca-Cola Adopts 1990’s Strategy: 2-for-1 Stock Split (KO, PEP)
April 25, 2012 by Jon C. Ogg
The company’s board of directors announced that it has voted to recommend a two-for-one stock split. While this would be the first split in 16 years, it is the 11th stock split in its 92-year history. The company will effectively increase the number of authorized shares from 5.6 billion shares to 11.2 billion shares and this and other matters will be voted on at a special shareowners meeting anticipated to be held on July 10, 2012.
Keep in mind that Pepsico, Inc. (NYSE: PEP) reports earnings this week. Pepsi’s dividend yield is 3.1% and Coca-Cola’s dividend yield is 2.8%. It has been almost equally long since Pepsi had a stock split and the Pepsi price of $66.51 against a price of $74.12 for Coca-Cola.
On a longer-term basis, Coca-Cola intends to double its revenues this decade. It is a plan that “provides a clear roadmap for creating value for our consumers, customers, bottling partners and shareowners.”
JON C. OGG
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