Key Points
Coca-Cola generates robust profits, which management uses to fund dividend payouts to shareholders.
The company has raised its dividend every year for more than six decades straight.
Investors who buy the stock should not expect to outperform the S&P 500 in the long run.
Coca-Cola (NYSE: KO) is a well-regarded company that has a storied history of dominating the beverage market with its extremely popular drink products. This is a global enterprise today that has proven pricing power and generates robust earnings. And it can easily draw the attention of income investors.
This business does a great job returning capital to investors. Here's how many shares of Coca-Cola investors would need to generate $10,000 in yearly dividends.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
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Calling all income investors
In February, Coca-Cola's board of directors approved a dividend increase, with the quarterly payout now totaling $0.51 per share. Investors that want to make $10,000 in annual income from the company would need to own about 4,902 shares.
Coca-Cola's dividend yield of 3.06% is much higher than the average 1.25% of the S&P 500 index. And more impressive is the fact that 2025 marks Coca-Cola's 63rd straight year of a dividend increase.
Stable and predictable
There's almost no threat that Coca-Cola's dividend will go away. This is a competitively advantaged business, with one of the strongest brands in the world. And it doesn't invite much disruption, which should give investors confidence that Coca-Cola will be around and very profitable far into the future.
This stock has significantly underperformed the overall market in the past decade. This trend will likely persist. But buying Coca-Cola is a smart choice for income investors that value stability and predictability.
Should you invest $1,000 in Coca-Cola right now?
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.