It's been a rough couple of years for shareholders of Coca-Cola Amatil Ltd (ASX: CCL).
At the same time as the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) charged ahead to fresh multiyear highs, shares of the beverage manufacturer retreated heavily. In fact, they're currently trading at a 39.7% discount to their price in March 2013 at just $9.30.
While the stock has heavily underperformed the broader market however, 2015 could be a much better year for those investors who chose to remain patient, and certainly for those who are interested in starting up a position in the company today.
Here are three reasons why Coca-Cola Amatil is looking like such a tasty buy right now…
1. Review. The company has undertaken a strategic review, identifying numerous ways to boost its performance. This includes up to $100 million in annual cost savings, a greater focus on marketing and product development and improved operating efficiency. When the company released the results of its review in October, it said it was expecting EPS to grow over the coming years while no more losses should be recognised beyond 2014.
2. Growth. Investors should also expect stronger growth from the company's Indonesian division. CCA's parent company, The Coca-Cola Company, has acquired a 29.4% stake in the division of which the proceeds will be put towards accelerating expansion of production, warehousing and cold drink infrastructure in the market. This could help to generate substantial returns over the coming years.
3. Dividends. Despite its weak performance recently, CCA maintains a strong balance sheet which has enabled it to make decent dividend distributions. In FY15, Morningstar estimates the stock will pay 40.5 cents per share, putting it on a yield of 4.4% (franked to 75%). In a low interest rate environment, that is a very attractive yield.
An even better buy than Coca-Cola Amatil in 2015
