Beverages giant Coca-Cola Co. (KO: Quote) said Wednesday that its board of directors has recommended a two-for-one stock split to shareholders. The stock split would be the first in 16 years and the eleventh in the stock's 92-year history.
Muhtar Kent, Chairman and CEO of Coca-Cola said, "Our recommended two-for-one stock split reflects the Board of Directors' continued confidence in the long-term growth and financial performance of our Company. Our system's 2020 Vision to double our revenues over this decade provides a clear roadmap for creating value for our consumers, customers, bottling partners and shareowners."
Coca-Cola noted that implementation of the stock split requires approval by shareowners of an increase in the number of authorized shares of the company's common stock to 11.2 billion from 5.6 billion.
Shareholders will vote on these matters at a special meeting expected to be held on July 10, 2012. If approved, the record date for the split is expected to be on or about July 27.
Each shareowner of record on the close of business on the record date will receive one additional share of common stock for each share held. The company expects the new shares to be distributed on or about August 10, 2012.
Coca-Cola's common stock began trading in 1919. Since its original listing, the stock has split 10 times - first in 1927 and most recently in 1996. The company noted that with all dividends reinvested annually, one share of common stock purchased for $40 in 1919 would be worth about $9.8 million today.
In mid-February, Coca-Cola said its board of directors approved the company's 50th consecutive annual dividend increase, raising the quarterly dividend 8.5 percent to $0.51 per common share from the previous $0.47 per share. This is equivalent to an annual dividend of $2.04 per share, up from $1.88 per share in 2011.
The company returned $8.6 billion to shareowners in 2011, through $4.3 billion in dividends and $4.3 billion in share repurchases.
Last week, Coca-Cola reported an 8 percent increase in profit for the first quarter as the company sold more drinks across all geographies. Net income for the first quarter was $2.05 billion or $0.89 per share, up from $1.90 billion or $0.82 per share in the prior-year quarter. Net operating revenues for the quarter increased 6 percent to $11.14 billion.
In Wednesday's session, KO is trading at $74.68, up $0.56 or 0.75 percent on a volume of 1.68 million shares.
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by RTT Staff Writer
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