Coca-Cola Co. (KO:US), the world’s largest soft drink maker, authorized a new plan to buy back 500 million shares, valued at about $18.9 billion at yesterday’s closing price, as it returns cash to investors.
The new authorization doesn’t affect the plan to buy back $2.5 billion to $3 billion in stock this year, the Atlanta-based company said today in a statement. Coca-Cola said its current repurchase program was authorized in 2006.
Coca-Cola has risen 48 percent since Chief Executive Officer Muhtar Kent took over in July 2008, compared with an 9.9 percent gain for rival PepsiCo Inc. (PEP:US) Kent has pledged to reach $200 billion in revenue for the company and its bottlers globally by 2020, double the sales generated in 2010.
“This company is in a good spot -- they don’t know what to do with all their cash except to give it back to shareholders,” Jack Russo, an analyst with Edward Jones & Co. in St. Louis, said in a telephone interview. “They’ve been active share repuchasers for a long time.”
Coca-Cola rose (KO:US) 0.3 percent to $37.84 at the close in New York. The shares have gained 8.2 percent this year.
Directors also declared a quarterly dividend of 25.5 cents, payable Dec. 17 to shareholders of record as of Nov. 30. The company completed a 2-for-1 share split in August.
The company had $18.1 billion in cash and equivalents (KO:US) as of Sept. 28. Coca-Cola authorized the repurchase of as many as 300 million shares in 2006.
Kent has adjusted prices and introduced new products to cope with weaker demand in European nations facing a persistent debt crisis and slowing growth in China and Brazil. Earlier this week, the company reported a 3.9 percent increase in third- quarter profit as sales volumes in Europe improved.
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