Coke is Sill the One for Dividends and Appreciation

12/11/2018 5:00 am EST


Ned Piplovic

Assistant Editor, Eagle Financial Publications

While Coca-Cola Company (KO) has rewarded its shareholders with a combination of steady capital gains and dividend income growth for decades, observes Ned Piplovic, editor of DividendInvestor.

The company sells its products in more than 200 countries under more than 350 different brands, including Coca-Cola/Coke, Fanta, Sprite, Minute Maid, Georgia, Powerade, Schweppes, Aquarius, Dasani, Simply, Glacéau, Gold Peak and FUZE TEA.

Coca-Cola — paying 3.2% — has the highest dividend yield in the soft drinks segment. In addition to offering the top yield among its peers, KO has enhanced its annual dividend payout more than five-fold over the past two decades, which corresponds to an average growth rate of  8.6% per year.

The Coca-Cola Company has distributed quarterly dividend since 1920 and has hiked its annual dividend income payout for the past 55 consecutive years. This record of consecutive annual dividend boosts places the company among the elite dividend-paying companies in the Dividend Aristocrats group.

As an exclusive group, the Dividend Aristocrats currently contains just 52 companies that meet the requirements of being a part of the S&P 500 Index with a market capitalization of at least $3 billion and a record of at least 25 consecutive annual dividend hikes.

Furthermore, the Coca-Cola Company even exceeds the minimum requirement of at least 50 consecutive annual dividend boosts for inclusion in an even more exclusive company of 16 Dividend Kings.

In addition to reliable long-term dividend distributions, the company currently offers  shareholders a 3.2% dividend yield, as well as a moderate but steady share price growth.

Despite mild volatility in the first half of 2018, KO’s share price gained 8.6% over the past 12 months and nearly 25% over the past two years. After a pullback in early 2018, the share price recovered all those losses by the first week of November and advanced further to reach its new all-time high on November 19, 2018.

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