Key Points
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Coca-Cola’s board of directors has increased the quarterly dividend payout for 64 consecutive years.
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Given the durable demand this business registers, and the sizable profits it collects, investors can view this as a safe stock.
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Coca-Cola (NYSE: KO) is an established company that is a leader in its industry. This has supported its historical track record of generating superb profits. The business posted a 35% operating margin in its latest fiscal quarter (ended April 3).
This results in a strong financial position that enables Coca-Cola to return capital to investors. But how many shares of this top beverage stock would you need to collect $5,000 in yearly dividends?
In February, Coca-Cola’s board of directors approved a 4% dividend hike to $0.53 per share on a quarterly basis. This marked the 64th straight year the company had increased its dividend. That’s an unbelievable active streak that makes Coca-Cola a Dividend King, a company that has increased its dividend for 50 or more consecutive years.
To generate a $5,000 passive income stream, investors would need to own 2,359 shares. Based on today’s stock price of $81.29, this equates to an almost $192,000 capital outlay.
Coca-Cola’s dividend yield of 2.61% is 149% higher than the S&P 500 index’s 1.05%. What’s even more encouraging, though, is that there is minimal risk that the business will ever pause this payout. Demand is durable through various economic scenarios. And there is almost no threat of disruption or obsolescence.
This setup makes Coca-Cola one of the safest stocks an investor can own.
Should you buy stock 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.
