With a 63-Year History of Dividend Hikes, It's a King Among Kings

It has been a turbulent year for markets. Investors are concerned about the state of the economy. And ongoing geopolitical tensions don't help alleviate worries. In this type of environment, it might be difficult to find places to invest your hard-earned savings.

During uncertain times, which is the perfect way to characterize 2025 thus far, there's one monster dividend stock that investors might turn to if they want to earn steady income. This industry-leading enterprise is a king among kings that could be just what your portfolio needs.

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Safety and stability thanks to durable demand

As of June 23, shares of Coca-Cola (NYSE: KO) have climbed 12% in 2025. This gain trounces the S&P 500 index's 2% rise this year. It appears the market is placing a high value on a safe and stable business, given the uncertainty surrounding the future from both macroeconomic and geopolitical perspectives.

Coca-Cola is as steady as they come. It sees durable demand for its popular beverages. Unlike many other companies in different industries, Coca-Cola just isn't as exposed to the whims of the economic cycle. Consumers still love to spend money on their favorite drinks, no matter what's going on. I think this will still be true decades from now.

There is minimal threat Coca-Cola will become obsolete. For starters, it has one of the most iconic brands in history. This leads to tremendous customer loyalty and proven pricing power. Coca-Cola has a leading market share in the non-alcoholic ready-to-drink industry on a global scale. And it has a presence in more than 200 countries.

Coca-Cola's profitability is hard to ignore. Since it primarily offloads the capital-intensive bottling and distribution process to third parties, the company can operate a more efficient business model. This explains how the company posted a superb 32.9% operating margin in Q1 (ended March 28).

The leadership team seems fairly confident as it looks ahead. Coca-Cola expects organic revenue to rise 5% to 6% in 2025. And to add a level of optimism, executives believe the ongoing tariff "impact to be manageable."

Dividends make this a top stock for certain investors

Coca-Cola's profitability is impressive. Management is intensely focused on returning its excess cash to shareholders in the form of dividends. This company is a Dividend King, having raised its payout in a jaw-dropping 63 straight years (and counting). The last bump was announced in February, with the current dividend yield now at 2.87%.

That dividend is a boon for investors with sizable stakes in the beverage giant. Just look at Berkshire Hathaway, which owns 400 million shares. This brings in $816 million in annualized income for the Warren Buffett-led conglomerate.

To be clear, I think Coca-Cola makes sense as a worthy investment candidate only for those who care mostly about dividend income. It's difficult to predict what the future will hold, but there's certainly a good chance the company will continue to increase its payout indefinitely. And if broader macro concerns are on your mind, owning Coca-Cola could provide much-needed peace of mind for your portfolio.

But for those investors who want to generate market-beating returns from the stocks they own, it's probably best to avoid Coca-Cola. Even including dividends, the stock has underperformed the S&P 500 in the past three-, five-, and 10-year periods. That's not exactly a track record that attracts growth investors. I see no reason to expect this trend to change over the next decade and beyond.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.