Key Points
Coca-Cola Consolidated is The Coca-Cola Co.'s largest bottler in the United States.
It just reported excellent third-quarter earnings, and its share price moved higher.
The company continues to improve its margins and makes for a great, maybe slightly boring (in a good way), investment.
Shares of The Coca-Cola Co.'s largest U.S. bottler, Coca-Cola Consolidated (NASDAQ: COKE), are up 5% as of 11 a.m. ET on Wednesday, according to data provided by S&P Global Market Intelligence.
Coca-Cola Consolidated reported third-quarter earnings that saw sales, adjusted net income, and cash from operations (CFO) rise by 3%, 7%, and 10%, respectively, during the first nine months of the year.
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Overall, it was a solid quarter that saw gross margins, operating margins, and profit margins return to expansion again, prompting the market to respond positively today.
Coca-Cola's sparkling quarter
Since 2020, Coca-Cola's gross margins have improved from 35% to 39% and its cash from operations margin rose from 9% to 12%. The company's Q3 report highlighted that this margin expansion continues to trend in the right direction.
Continuously streamlining its bottling operations, the Coca-Cola bottler provided investors with total returns nearly five times higher than those of the S&P 500 (SNPINDEX: ^GSPC) since 2005.
Over the last decade, the bottler has grown sales by 15% annually as it acquired new facilities and expanded upon the territories it serves in the U.S. Thanks to its impressive cash generation, the company continued to do this in Q3 as it bought a production facility in Tennessee that it had previously been leasing.
Image source: The Coca-Cola Company.
President and COO Dave Katz added, "We now own all of our production facilities, which we believe to be strategic assets in our operations."
Through moves like these, Coca-Cola Consolidated's margins may keep steadily improving, giving it the potential to be a powerful compounder.
Throw in the company's quarterly dividends and propensity to pay out special dividends, and Coca-Cola Consolidated looks like a stellar, steady-Eddie investment to make at a reasonable 20 times earnings.
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Josh Kohn-Lindquist has positions in Coca-Cola. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.