Investing

Dividend King Coca-Cola Just Paid Investors: How Much Did They Get?

Trey Thoelcke

Published: December 16, 2024 9:50 am

Coca-Cola Co. (NYSE: KO) is rewarding its shareholders once again with a quarterly dividend of $0.485, payable on Monday, Dec. 16. That is the same as the prior payout. The stock has underperformed recently, but the dividend payment underscores the management’s commitment to continuing to deliver consistent value to investors.

24/7 Wall St. Key Points:

• Coca-Cola Co. (NYSE: KO) just rewarded its shareholders again with a dividend.
• This nonalcoholic beverage giant has grown its dividend for 62 straight years.
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Why Investors Like Dividends

Investors favor dividend stocks for two main reasons. The first is that they offer enticing total return potential. Total return is a comprehensive measure of investment performance that includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. It is one of the most effective ways to boost the prospects of overall investing success.

Dividend stocks can also provide investors with a steady, reliable stream of passive income. Passive income is money that is earned with little to no ongoing effort, usually from assets that generate cash flow. This income can come from a variety of sources, including stock dividends. Generating passive income is a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.

A Dividend Aristocrat

Coca-Cola is the epitome of a stable and dependable stock. It has not only paid out but has increased its dividend annually for 62 years. That is well more than the 25 straight years of growth it takes for an S&P 500 member to become a Dividend Aristocrat. In fact, that makes it a Dividend King, a member of that exclusive group of stocks that have at least 50 consecutive years of dividend growth.

Since 2000, its dividend has had a compound annual growth rate of 39% or so. The current dividend yield is 3.1%, which is greater than the consumer goods sector average but less than the yield of rival PepsiCo Inc. (NASDAQ: PEP). The share price has grown by about 118% since 2000 as well, offering investors some growth along with the income.

Coca-Cola, the Company

This company manufactures, markets, and sells various nonalcoholic beverages in over 200 countries and territories worldwide. Its offerings include sparkling soft drinks, sparkling flavors; water, sports, coffee, and tea; juice, value-added dairy, and plant-based beverages; and other beverages. It also offers beverage concentrates and syrups, as well as fountain syrups to fountain retailers, such as restaurants and convenience stores.

The company sells its products under the Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, caffeine-free Diet Coke, Cherry Coke, Fanta Orange, Fanta Zero Orange, Fanta Zero Sugar, Fanta Apple, Sprite, Sprite Zero Sugar, Simply Orange, Simply Apple, Simply Grapefruit, Fresca, Schweppes, Dasani, Fuze Tea, Glacéau Smartwater, Glacéau Vitaminwater, Gold Peak, Ice Dew, Powerade, Topo Chico, and Minute Maid brands.

It operates through a network of independent bottling partners, distributors, wholesalers, and retailers, as well as through bottling and distribution operators.

Its headquarters are in Atlanta. The company was founded in 1886 as a purveyor of “temperance” drinks. It went public in September of 1919. Now it competes with or is similar to Keurig Dr Pepper Inc. (NASDAQ: KDP), Monster Beverage Corp. (NASDAQ: MNST), PepsiCo, and others.

The company has named its new chief operating officer, and it recently received some backlash for scaling back its sustainable packaging targets. Earlier in the year, Coca-Cola lost in tax court over its dispute with the Internal Revenue Service.

Coca-Cola, the Stock

The share price is less than 15% higher than five years ago, underperforming the S&P 500. Shares are currently trading in the same neighborhood as six months ago. They hit an all-time high of $73.53 last September, and the mean price target is close at $73.76. However, because of the recent pullback, Wall Street sees almost 17% upside in the coming year. The consensus recommendation is to buy shares, including six Strong Buy recommendations. Wells Fargo recently reiterated its Buy rating.

The stock remains a top Warren Buffett pick. Institutional investors hold more than 64% of the shares. Berkshire Hathaway has a greater than 9% stake. BlackRock, State Street, and Vanguard also have notable stakes. More than 28 million shares, or less than 1% of the float, are held short. Note that CEO James Quincey parted with over $6 million worth of shares recently.

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