Things could get fiery in today's ASX world cup match between retail behemoth Wesfarmers Ltd (ASX: WES) and beverage manufacturer Coca-Cola Amatil Ltd (ASX: CCL). While the former has continued to solidify its dominance in the market, it has come at the latter company's expense. However, it's sure to be a top quality match with CCA just starting to rediscover its form.
Here's how the pair line up
|
|
Wesfarmers |
Coca-Cola Amatil |
|
|
ASX:WES |
ASX:CCL |
|
Recent Price |
$41.63 |
$9.48 |
|
Market Capitalisation |
$47.1 billion |
$7 billion |
|
Forecast Dividend Yield | Franking |
4.6% | 100% |
4.8% | 75% |
|
Projected P/E ratio |
20 |
16.9 |
|
Price-Book ratio |
1.59 |
4.17 |
Source: Morningstar
Wesfarmers
Wesfarmers has been amongst the ASX's top stocks over the last five or so years with its returns smashing the gains made by the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) as well as various other blue-chip corporations.
In recent times, Wesfarmers's Coles business has been able to use its weight to exploit the defence of suppliers like Coca-Cola Amatil. And as Coles and rival Woolworths Limited (ASX: WOW) continue to tighten their grasp over the supermarket industry, things could get worse for CCA fans. That's a goal for Wesfarmers!
However, as is often the case, the bigger the company, the slower it is to move. With the stock now trading on a P/E ratio of 20 with a market capitalisation of $47.1 billion, it seems the expectations of fans may have gone a little overboard – particularly if consumer confidence remains low due to the government's horror budget. This would likely see a decrease in sales from various Wesfarmers' businesses like Kmart, Target and Bunnings.
Wesfarmers somehow snuck one late goal past the goalie thanks to its excellent fully franked dividend yield.
Coca-Cola Amatil
Coca-Cola Amatil (CCA) will no doubt come into today's match as the underdog. It is just a fraction of the size of Wesfarmers and has been on a sharp decline over the last 13 months – down 37.5% in that time.
However, the stock has managed to find its feet over the last couple of days, climbing nearly 4% after UBS upgraded its recommendation on the stock. Although it is little consolation for shareholders, it is an indicator that the downside risks are now outweighed by the enormous long-term potential! This has the crowd cheering as CCA charges, and it's a goal!
CCA managed to score another quick goal with the backing of investing great Warren Buffett. Although he does not own shares in the stock, he is a firm believer behind the strength of the brands which CCA have exclusive rights to distribute in various regions around the world. That puts scores level with only minutes left to play!
Full Time
Despite the differences in size, it was hard to split the companies as both boast enormous strength. However, CCA managed to get away with a 3-2 win thanks to its momentum coming into today's match. No doubt that momentum could help drive them a long way in this championship.
While Coca-Cola Amatil could be a sure bet to make it all the way in this tournament, The Motley Fool's TOP analysts have uncovered more than a dozen other companies that are also worth your attention…
