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Dividend Kings In Focus: Coca-Cola


Updated on July 9th, 2025 by Felix Martinez

Investors looking for the best-in-class dividend growth stocks should consider the Dividend Kings. These are stocks that have raised their dividends for at least 50 consecutive years. It is no easy task to raise a dividend for over five decades, which explains why there are only 55 Dividend Kings.

You can see all 55 Dividend Kings here.

Additionally, we created a downloadable list of all 55 Dividend Kings, along with key financial metrics such as dividend yields, price-to-earnings ratios, and more. You can download your copy of the Dividend Kings list by clicking on the link below:

 

Click here to instantly download your free spreadsheet of all Dividend Kings now, along with important investing metrics.

Coca-Cola (KO) is a time-tested Dividend King. It has raised its dividend for 62 consecutive years. This is an awe-inspiring history of consistent dividend increases, even in complex operating environments. Coca-Cola benefits from global competitive advantages and a recession-resistant business model.

Investors can expect the company to continue increasing its dividend for many years to come. This article will discuss Coca-Cola’s recent earnings, future growth potential, and expected returns.

Business Overview

Coca-Cola was founded in 1892. Today, it is the world’s largest non-alcoholic beverage company. It owns or licenses more than 500 non-alcoholic beverages, including both sparkling and still beverages.

It now sells products in more than 200 countries worldwide and has 20 brands that each generate over $1 billion in annual sales. Its brands account for approximately 2 billion servings of beverages worldwide every day, generating more than $47 billion in yearly revenue.

The sparkling beverage portfolio includes the flagship Coca-Cola brand, as well as other soda brands like Diet Coke, Sprite, Fanta, and more. The still beverage portfolio includes water, juices, and ready-to-drink teas, such as Dasani, Minute Maid, Vitamin Water, and Honest Tea.

Source: Investor Presentation

Coca-Cola dominates the sparkling soft drinks market, but the company is attempting to maintain and even improve its dominant position with product extensions of existing popular brands, including reduced- and zero-sugar versions of brands like Sprite and Fanta.

This is a challenging time for The Coca-Cola Company. Sales of soda are slowing in developed markets, such as the U.S., where soda consumption has been steadily declining for years.

Declining soda consumption is a significant challenge for the company. While Coca-Cola’s total volumes still rely heavily on sparkling beverages such as soda, the company has gone to great lengths in recent years to diversify away from its core products, recognizing that the long-term growth prospects for sparkling beverages aren’t particularly inspiring.

Coca-Cola has acquired multiple still beverage brands in recent years to revitalize its future growth.

Growth Prospects

In an effort to return to growth, Coca-Cola has invested heavily outside of soda in areas such as juices, teas, dairy, and water, to appeal to changing consumer preferences. Despite headwinds from declining soft drink consumption, we continue to see Coca-Cola as having a favorable long-term growth outlook.

We like the stock because it competes in an industry that continues to grow globally at a rate exceeding that of broad economic growth. This leads to strong levels of overall growth in the industry, which Coca-Cola has certainly been capitalizing on in recent years.

Additionally, the ready-to-drink category is sold through highly diversified channels and is projected to continue growing at mid-single-digit rates for Coca-Cola and the industry. This is particularly true for still beverages, such as milk, tea, and water. Coca-Cola’s years-old strategy to diversify away from sparkling beverages is paying off, and it is undoubtedly bearing fruit.

Coca-Cola also continues to acquire brands in order to grow, including its acquisition of Costa, a coffee brand based in the U.K.

This was undoubtedly an out-of-the-box buy for a sparkling beverage company, but Coca-Cola is doing what it takes to secure its future growth.

Ultimately, while Coca-Cola is the world’s largest beverage company, there remains ample room for further growth.

Source: Investor Presentation

The market potential for Coca-Cola’s portfolio of beverages is massive, especially in developing and emerging markets. This should provide the company with a long runway for growth in the years to come.

The Coca-Cola Company reported Q1 2025 net revenues of $11.1 billion, down 2% from Q1 2024, due to a 5% currency headwind and a 3% decline from refranchising. However, organic revenues (non-GAAP) grew 6%, driven by 5% price/mix and 1% growth in concentrate sales. Unit case volume increased by 2%, driven by growth in India and China. Operating income jumped 71% to $3.7 billion, with a 32.9% margin (comparable non-GAAP 33.8%, up from 32.4%). EPS grew 5% to $0.77; comparable EPS (non-GAAP) rose 1% to $0.73 despite currency pressures. Operating cash flow was negative $5.2 billion, primarily due to a $6.1 billion fairlife payment, resulting in negative free cash flow (non-GAAP) of $5.5 billion.
Segment results showed the Europe, Middle East, and Africa region with 3% volume and 7% organic revenue growth, as well as 8% operating income growth (non-GAAP). Latin America had flat volume, 13% organic revenue growth, and 18% operating income growth (non-GAAP). North America’s volume declined 3%, with 3% organic revenue growth and 4% growth in operating income (non-GAAP). The Asia Pacific region saw 6% volume and 7% organic revenue growth, along with 7% growth in operating income (non-GAAP). Bottling Investments declined 17% in volume, with operating income down 21% (non-GAAP). The company gained a share of the value in nonalcoholic beverages.
Coca-Cola maintained its 2025 guidance, expecting 5–6% organic revenue growth (non-GAAP) and 2–3% comparable EPS growth (non-GAAP) to $2.94–$2.97, despite a 5–6% currency headwind. Free cash flow (non-GAAP, excluding fairlife payment) is projected at $9.5 billion. CEO James Quincey emphasized the company’s global strategy and local execution, citing activations in India and China, as well as innovation in brands like fairlife, which positions Coca-Cola to manage tariff and geopolitical challenges while driving growth.

Competitive Advantages & Recession Performance

Coca-Cola enjoys two distinct competitive advantages: its strong brand and global scale. According to Forbes, Coca-Cola is the sixth-most valuable brand in the world. The Coca-Cola brand is reportedly worth $106 billion.

Additionally, Coca-Cola boasts an unparalleled distribution network. It has the most extensive beverage distribution system in the world. Of the roughly 60 billion beverages consumed worldwide every day, approximately 2 billion come from Coca-Cola.

These advantages enable Coca-Cola to remain highly profitable, even during economic downturns. The company held up very well during the Great Recession:

Not only did Coca-Cola survive the Great Recession, but it also thrived. Earnings per share grew by 36% from 2007 to 2010, demonstrating the durability and strength of Coca-Cola’s business model. The company’s dividend also appears very safe.

Based on our projected earnings for the year and the current dividend per share run rate, the payout ratio stands at a relatively comfortable 69%.

Valuation & Expected Returns

Coca-Cola’s adjusted earnings per share are expected to reach $2.97 per share in 2025. At its current price levels, Coca-Cola trades for a price-to-earnings ratio of 23.5.

This is slightly higher than our fair multiple of 23 times earnings, which considers the stock’s historical valuations and future growth estimates. Accordingly, we expect a rising P/E multiple to subtract 0.9% from annual returns over the next five years.

Additionally, we anticipate annual EPS growth of 7%, while Coca-Cola’s stock offers a dividend yield of 2.9%. We expect total annualized returns of ~9.0%.

These are rather alluring total return projections, considering they come from such a trustworthy company as Coca-Cola, given the current highly uncertain environment. Therefore, Coca-Cola stock receives a hold recommendation because of the expected returns.

Final Thoughts

Coca-Cola has a long and established track record of delivering steady dividends, accompanied by annual dividend increases, even during recessions and other challenging periods. We fully expect the company to continue delivering relatively resilient results during the ongoing macroeconomic turmoil and emerge from this phase even stronger than ever. The company has multiple growth catalysts and a dominant global position in the beverage industry to support it.

The stock appears to be slightly overvalued, which might suggest it’s a decent opportunity to consider allocating capital to it. Coca-Cola should also continue to pay its dividend comfortably, currently offering a solid yield above 2.9%. It should have little trouble raising the dividend each year.

Overall, Coca-Cola can be an attractive holding for income-focused investors.

The following articles contain stocks with very long dividend or corporate histories, ripe for selection for dividend growth investors:

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