Is Coca-Cola Still a Good Dividend Growth Stock to Buy in 2025?

Is Coca-Cola a Continuous Dividend Booster Worth Investing in for 2025?

Coca-Cola (KO) has long been a staple in many investment portfolios, known for its iconic brand and consistent dividend payments. Over the past five years, the company's payout ratio has averaged around 80%, with it currently sitting a few percentage points below that.

This year, Coca-Cola expects to grow its revenue organically by between 5% and 6%. However, the company projects a slower growth rate on the bottom line, with comparable earnings per share increasing by no more than 3%.

One of the key attractions for investors in Coca-Cola is its dividend yield, which currently stands at 2.9%. This is significantly higher than the S&P 500 average yield of 1.2%. The company's dividend growth rate over the past decade has been impressive, with quarterly payouts rising by around 55%, averaging a compounded annual growth rate of 4.5%.

However, the question for investors today is whether Coca-Cola's level of profitability is strong enough to leave room for more dividend increases in the future. The company's historically safe dividend may be in question due to potential challenges ahead.

Coca-Cola remains a top dividend growth stock to buy and hold for the long term. Its business has shown that it can perform well even under changing market conditions. If you're looking for a good dividend stock that you can put in your portfolio and not worry about, Coca-Cola can make for an excellent option.

It's worth noting that in 2022, investment companies with a higher average annual dividend growth than Coca-Cola included PepsiCo, which recently showed a dividend growth rate around 7.12%. Other investment firms with such dividend growth rates are not detailed in the results.

Despite potential challenges, Coca-Cola's stock can still provide investors with a fantastic payout. In fact, the company has increased its dividend for 63 consecutive years, with a recent increase of more than 5%.

As of now, Coca-Cola's stock has remained a solid buy, generating year-to-date returns of around 15%. With its strong brand, adaptability to changing consumer preferences, and consistent dividend payments, Coca-Cola continues to be a reliable choice for investors seeking dividend growth.