Coca-Cola Adopts 1990’s Strategy: 2-for-1 Stock Split (KO, PEP)

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