Key Points
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Coca-Cola has raised its dividend annually for the past 64 years.
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The dividend yields 2.2% at the current price.
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You would need to concentrate a lot of investment in Coca-Cola stock to receive $10,000 in annual dividends.
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Dividend stocks are an important component of a well-diversified portfolio at any time, and Coca-Cola (NYSE: KO) is one of the best. It’s a Dividend King, which means it has raised its dividend for at least 50 years, and it has one of the best track records on the list, with 64 consecutive increases. That’s reliably growing passive income.
But getting $10,000 annually in dividends from Coca-Cola stock may require a bigger investment than you realize.
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Coca-Cola is beating the market
Coca-Cola is crushing the market this year, up 38% versus the S&P 500‘s (SNPINDEX: ^GSPC) 12% gain. It’s been performing phenomenally despite inflation, and investors see the stock, which has been a longtime favorite of investing legend Warren Buffett, as a safe haven against artificial intelligence (AI) stocks.
However, the high stock price means the dividend yield is lower than usual, because price and yield move inversely. Today, Coca-Cola’s dividend yield is 2.2%.
It pays $2.12 in annual dividends per share as of its February increase, so you’ll need 4,717 shares to reach $10,000 in annual dividends. At the current price, 4,717 shares would cost $452,926.
That’s nearly half of $1 million in Coca-Cola stock alone. Unless you have much more than that to invest in a variety of dividend stocks, it makes more sense to spread your money around and benefit from other dividend stocks instead of concentrating too much in one stock.
Should you buy stock in Coca-Cola right now?
Before you buy stock in Coca-Cola, consider this:
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
