Whereas it has been a constant performer for many years, this firm nonetheless has a large progress alternative.
I all the time believed that Dividend Kings are a fantastic instrument for traders. Positive, it may be thrilling to have high-flying tech shares which can be making large good points and creating buzz with merchandise corresponding to synthetic intelligence and machine studying. However everybody who is aware of the story of the tortoise and the hare is aware of that gradual and regular wins the race, and that additionally applies to investing.
In any case, take a look at Warren Buffett, the legendary Oracle of Omaha and an unimaginable worth investor. Buffett took the helm of Berkshire Hathaway within the Sixties and created a massively rich conglomerate by investing in worth shares that paid a robust constant dividend.
Dividend shares are one of the best ways to develop wealth over a protracted time frame due to the facility of compounding. If you get your quarterly dividend cost, you merely reinvest it into your portfolio for added progress. Or, in the event you’re already retired, you’ll be able to take that dividend verify and use it for each day dwelling bills.
Dividend Kings are dividend shares which have a particular distinction — they characterize corporations which have elevated their dividend annual payouts for at the very least 50 consecutive years. Solely 55 corporations can at the moment say that. That is my go-to listing for locating one of the best dividend shares that you would be able to depend on for a constant, rising payout.
Picture supply: Getty Photos.
Selecting one of the best Dividend King
If I had to decide on one Dividend King to purchase proper now, there is not any doubt that it is Coca-Cola (KO 0.55%). The dominant model in mushy drinks has 30 separate manufacturers value at the very least $1 billion. Whereas it is best-known for Coca-Cola and Sprite, the Atlanta-based firm additionally sells bottled water, teas, coffees, juices, sports activities drinks, and alcoholic drinks.
At the moment, Coca-Cola merchandise are bought in additional than 200 nations and territories. However the firm believes it has an incredible alternative in entrance of it. Coca-Cola estimates that 80% of the worldwide inhabitants resides in growing and rising markets — and in these markets, Coca-Cola solely enjoys a 7% market share.
The corporate reported $12.5 billion in income within the second quarter, up 1% from a yr in the past. Its earnings per share have been $0.88, up 58% and restrained considerably by an 11-point foreign money headwind.
To date in 2025, Coca-Cola inventory is up 12%, and it gained 37% within the final 5 years. Whereas that is not as explosive as a tech inventory, I additionally respect the truth that Coca-Cola’s dividend has additionally elevated greater than 24% within the final 5 years. That sort of constant dividend progress offsets the softer inventory return, making this Dividend King much more interesting. Coca-Cola has elevated its dividend for 63 consecutive years, and its dividend yield of two.9% is a full share level greater than the yield of the typical shopper staples inventory.
Knowledge by YCharts.
Coca-Cola is the dividend inventory to personal in a tariff-centric world
There are numerous actually good Dividend Kings that I thought of — Stanley Black & Decker, Procter & Gamble, Johnson & Johnson, Walmart, Goal, and others. Whereas these are strong corporations, I am additionally very conscious that lots of them should confront the fact of tariffs. It makes importing items costlier and forces corporations into the tough resolution to both take up the fee (which eats into revenue margins) or go alongside the prices to prospects (which suggests greater costs).
Coca-Cola is not immune from tariffs, however its main prices for commodities corresponding to sugar, aluminum, and corn syrup may be extra simply managed. Coca-Cola’s reported gross margin of 62.4% was 133 foundation factors greater than a yr in the past, exhibiting that the corporate is doing a strong job in managing its prices regardless of greater commodity costs. The corporate did not even focus on tariff prices in its second-quarter earnings name, nevertheless it beforehand stated that it anticipated the impact of commerce tensions to be “manageable.”
The underside line
There’s nothing assured in investing, however while you put your cash right into a Dividend King, you might be practically assured of constant returns. Coca-Cola has been elevating its dividend for generations now, and it has a dominant place in its subject with an enormous alternative for continued progress.
There isn’t any query in my thoughts that it is the finest Dividend King to personal at the moment.
Patrick Sanders has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Berkshire Hathaway, Goal, and Walmart. The Motley Idiot recommends Johnson & Johnson. The Motley Idiot has a disclosure coverage.
