Meet a Dividend Growth Stock: Coca-Cola

Hello and welcome to the first edition of a new series here on the blog called “Meet a Dividend Growth Stock.” In it I’ll be providing a brief introduction to both some of the more popular dividend growth stock names and some you may not hear about that often. While not meant to be a complete research and analysis, I hope to provide a starting point for you to do more research on your own. Think of it like speed dating for stocks. πŸ˜‰ If you like the sounds of it, check out some of the links at the end to do further research. If not, no worries, hopefully you’ll find something over the course of this series.

To start off I’m highlighting Coca-Cola (KO), one of the best dividend growth stocks out there. KO has been raising dividends for 52 years now and has dividend growth rates of 8.9% (1 year), 8.1% (5 year), and 9.8% (10 year). The stock usually announces their dividend increases in February of each year and did so again last month, raising the quarterly dividend to $0.305 from $0.28 for an increase of 8.9%.

The global beverage giant was founded in 1886 and has a current market cap of $171 billion. Coca-Cola produces a wide variety of non-alcoholic beverages and has sixteen $1 billion dollar brands in its portfolio: Coca-Cola, Diet Coke, Sprite, Fanta, Minute Maid, Minute Maid Pulpy, Powerade, Dasani, Aquarius, Glaceau Vitaminwater, Georgia, Simply, Del Valle, Ayataka, and I Lohas.

Current headwinds facing the company include fear that the trend to healthier eating habits in this country and the potential for “soda taxes” could hurt Coca-Cola. I personally believe these fears are overblown, mostly due to how diversified the company is through all of their non-soda brands and how much of their sales they do globally which helps mitigate the risk.

With the stock trading at a current P/E of 20 I consider KO to be fairly valued and have been buying shares lately through my Loyal3 account. With its 52 year dividend growth history, steady 8-9% dividend increases, and its diverse brand portfolio of 500 brands, Coca-Cola makes for a great core holding in any dividend growth portfolio.

Here some resources and articles to help you research Coca-Cola further:

Morningstar: KO

Reuters: KO

Seeking Alpha: KO

Yahoo Finance: KO Dividend History

Welcome to Fair Valuation, Coca-Cola by Timothy M. David McAleenan Jr. @ Seeking Alpha. Older post, but with KO again trading around the same price, can be applied today.

 

What do you think of Coca-Cola? Do you own it in your dividend growth portfolio and do you consider it a core holding?

Full Disclosure: I am long KO. Do not take this post as a recommendation to buy or sell any stock listed. Always do your own research before you decide to invest. Please see my disclaimer page for more information. Good luck! πŸ™‚

4 comments

  1. Its one of the blue chips missing from my portfolio, SFZ. Im thinking of initiating a new position. I liked PEP a bit more because of their bigger snack business, but KO’s investment into Green Mountain has piqued my interest more into KO than PEP now.

    I would like to own KO and PEP – both will be great long term core holdings.

    1. Yeah I absolutely agree, why not own both? πŸ˜‰ Eventually I would like to have both as core holdings in my portfolio as well. To be honest I haven’t looked into PEP too much lately but with them being available on Loyal3, I’ll have to take a look and see if it’s a good stock to start adding at its current valuation.
      Thanks for stopping by and commenting R2R.

      Best wishes,

      SFZ

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