Key Takeaways
- Medium dividend yield of 2.7% in the last 12 months.
- Moderate dividend safety with a 75.6% LTM payout ratio.
- Moderate past 5-year dividend growth rate of 3.4% CAGR.
- High 2-year expected dividend growth rate of 5.0% CAGR.
- Current dividend yield is 6.9% lower than 5-year average.
How Does Coca-Cola Make Money?
Coca-Cola hardly needs an introduction, with it being the world’s largest non-alcoholic beverage company and all.
While you’re probably familiar with Coca-Cola (as a customer and an investor), you might not realize the sheer magnitude of brands that Coca-Cola owns within its portfolio.
Coca-Cola owns the brands Coca-Cola, Fanta, Sprite, Simply, Fresca, Schweppes, Thums Up, Aquarius, Ayataka, BODYARMOR, Dasani, Dr Pepper, Minute Maid, Powerade, fairlife, and more.
The company’s broad portfolio of established brands helps the company maintain dominance and earn substantial returns on capital.
Coca-Cola’s Current & Historic Dividend Yield
Coca-Cola’s dividend yield is 2.7%, meaning investors would get $27 in yearly dividends for every $1,000 invested in the stock.
You can find a stock’s dividend yield by simply dividing the company’s dividend over the last twelve months of $1.89 by the stock’s share price of $68.46, which is how we arrive at a dividend yield of 2.7%.
KO’s current dividend yield of 2.9% is a bit lower than its 10-year historical average:
It’s generally better to buy a stock when its dividend yield is higher than its historical average because a stock’s dividend yield rises when its share price falls.
Buying high-quality dividend stocks when the dividend yield is higher than average can be an effective investing strategy.
Coca-Cola’s current dividend yield is 6.9% lower than its 5-year average.
Notable Historic Dividend Yields:
- Last fiscal year average dividend yield: 3.1%
- 3-year average dividend yield of 2.9%
- 5-year average dividend yield of 3.0%
- 10-year average dividend yield of 3.1%
Check out Coca-Cola’s full dividend history >>>
Dividend Payment Schedule
Coca-Cola has not released its next ex-dividend date or dividend payment date. However, in the third quarter of last year, the company’s ex-dividend date was September 14th, 2023, and the company’s dividend payment date was October 2nd, 2023.
KO’s ex-dividend date will likely be in mid-September of this year, and its next dividend payment date will likely be in early October.
However, you should only consider investing in Coca-Cola if you feel confident that the stock has the proper financial safety to be a good investment for you.
Is Coca-Cola’s Dividend Safe?
Dividend safety is important for investors because it measures a company’s ability to continue paying and increasing dividends to shareholders without stopping or reducing dividend payments.
Cutting dividends is highly frowned upon on Wall Street, so companies generally only reduce or cut their dividend payments if they lack the financial means to continue paying them.
That’s why it’s important to judge a company’s financial health. A business that has a high dividend safety rating has strong earnings that can support dividend payments, so there’s a low risk of the company reducing its dividends.
Payout Ratio & Earnings Analysis
- LTM Dividends per Share: $1.89
- LTM Earnings per Share: $2.47
- LTM Payout Ratio: 75.6%
Coca-Cola has a payout ratio for the last twelve months of 75.6%, which indicates that 75.6% of its $2.47 earnings-per-share were distributed as a $1.89 dividend over the last 12 months.
Financial Health
Companies with a payout ratio between 70% and 90% are at a moderate risk of reducing their dividend. While they are paying a significant portion of their earnings to shareholders through the dividend, they retain some earnings for growth and emergencies.
However, any decrease in earnings or unexpected costs could pressure the company to cut its dividend to help the company maintain financial stability.
A payout ratio of 75.6% indicates that a company can continue to make its dividend payments, but Coca-Cola might struggle to continue paying dividends if profits ever decline.
Notable Historic Payout Ratios:
- LTM payout ratio: 75.6%
- 3-year average payout ratio: 76.1%
- 5-year average payout ratio: 79.2%
- 10-year average payout ratio: 125.2%
Check out Coca-Cola’s complete financial statements >>>
For the next fiscal year, Wall Street analysts expect Coca-Cola to have a dividend payout ratio of 68.4%.
It is worth noting that dividend safety can change over time, so it’s important to regularly monitor a company’s financial performance and dividend payment history.
Dividend Growth Analysis
Dividend growth is an important aspect of dividend investing because it means that dividends will grow over time, which helps to offset the erosive forces of inflation and boost total shareholder returns.
It also signals that a company prioritizes shareholders’ returns and shows that management has confidence that the company’s earnings will grow in the future.
The chart below shows how Coca-Cola has grown dividends per share at a 3.4% 5-year CAGR, which is an average dividend growth rate:
Notable Dividend Growth Rates:
- 4.5% for the past fiscal year
- 3.9% CAGR over the past 3 fiscal years
- 3.4% CAGR over the past 5 fiscal years
- 5.1% CAGR over the past 10 fiscal years
Dividend Forecast
What truly matters for dividend investors is a company’s potential to continue growing its dividends, as this will determine whether Coca-Cola will be a reliable dividend stock.
The chart below shows that Wall Street analysts forecast that Coca-Cola will grow dividends per share at an average rate of 5.0% over the next 2 years.
Generally, it’s better to see a company seeing higher dividend growth
But in Coca-Cola’s case, it’s good to see that the company is slowing its dividend growth because the company already has a concerningly high payout ratio:
View all Analyst Estimates for Coca-Cola >>>
How Long Has Coca-Cola Grown Dividends?
Coca-Cola has increased its dividends to shareholders for 62 consecutive years, making it a Dividend King.
Coca-Cola has an incredibly strong dividend track record.
The dividend history graph below shows a visual record of Coca-Cola’s dividend payments to shareholders over the past 21 years, and the full history is shown in the chart below:
Dividend FAQs:
What is Coca-Cola’s dividend yield?
Coca-Cola’s dividend yield for the last 12 months is 2.7%, because it’s $1.89 per share dividend paid in the last twelve months is 2.7% of Coca-Cola stock’s price of about $70/share. This means that for every $1,000 of Coca-Cola stock you own, you will receive about $18.90 in dividends annually.
Is Coca-Cola’s dividend safe?
Coca-Cola’s payout ratio for the last twelve months was 75.6%. This indicates that the company should be able to continue paying its dividend, although the dividend might be at risk in the future if profits ever fall.
When is Coca-Cola’s next ex-dividend date?
Coca-Cola’s next ex-dividend date is September 13th, 2024. KO’s next ex-dividend date will likely be in mid-September of 2024. If you purchase Coca-Cola stock before this date, you will be eligible to receive the stock’s upcoming dividend payment.
When is Coca-Cola’s next dividend payment date?
The next dividend payment date for Coca-Cola is October 1st, 2024. This means that any long-term owners or recent shareholders who bought their shares before the ex-dividend date will receive dividends on October 1st.
Is Coca-Cola a good dividend stock?
Coca-Cola is considered a reliable dividend stock with its long history of consistent dividend payments. The company has increased its dividend payout for 62 consecutive years, making it a favorite among income-focused investors.
Takeaway:
Coca-Cola is a Dividend King, currently offering investors a 2.7% dividend yield, with a payout ratio slightly above 70%.
The stock is best known for its impressive track record of 62 consecutive years of dividend growth.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. We aim to provide informative and engaging analysis to help empower individuals to make their own investment decisions. Neither TIKR nor our authors hold positions in any of the stocks mentioned in this article. Thank you for reading, and happy investing!
