Coca-Cola Serves Up Attractive Dividend Growth
We expect the beverage maker to generate high single-digit growth over the next decade.
Sonia Vora: Coca-Cola is one of the most attractive dividend stocks in the beverage space, with a yield above 3%. The company has increased its dividend for the last 55 years, and its payout ratio has averaged above 60% over the last decade, indicating its commitment to returning cash to shareholders. We expect its dividend will average high single-digit growth over the next decade, which is comparable to its historical rate.
We think Coca-Cola's ability to return excess cash to shareholders partly reflects its wide economic moat, which has helped it generate excess returns on invested capital despite a decade of volume declines in the domestic carbonated soft drink market. The firm possesses substantial brand intangible assets, as its investments in product innovation and marketing have helped establish Coca-Cola as one of the most recognizable brands in the world, allowing for entrenched retail relationships and brand-loyal customers. We also believe the firm enjoys cost advantages stemming from economies of scale in beverage production and its unparalleled global distribution network.
Sonia Vora does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.