Recent Buy – CCLAY


I enjoy visiting others’ blogs and reviewing their portfolios.  At times my investing approach is validated other times I get a fresh viewpoint.  There are occasions when a company that is not on my radar grabs my attention.  Such was the case when I ran across Dividenden Investor‘s holdings.  In his depot, Coca-Cola Amatil can be found.  The name Coca-Cola was the reason for my intrigue and just had to figure out what sort of creature this one was.

Coca-Cola Amatil trades on the Australian exchange under the symbol CCL with their ADR trading in the states as CCLAY.  They are one of Coca-Cola’s (KO) anchor bottlers under the 21st Century Beverage Partnership Model that KO is evolving towards.  Amatil’s territory includes Australia, New Zealand, Indonesia, Papua New Guinea, Fiji and Samoa.  They are a bottler for Coca-Cola products plus liquor (Jim Beam, Maker’s Mark,, coffees and foodstuffs.  Coca-Cola has a 29% ownership.

Coca-Cola Amatil pays a dividend twice per year on an interim/final schedule with franking credits.  Recently, the credit has been between 75-100% which translates to no or minimal double taxation for US investors.  At yesterday’s purchase price, the dividend yield translates to roughly 5.9%.  There is a risk of currency fluctuation as dividends are declared in Aussie$.

This is a continuation of my theory of the US$ being overvalued so my intent is to buy while it’s high and collect increasing dividends through the exchange rate.  Of course there’s the risk the US$ will stay strong if a border tax is enacted.