Coca-Cola (KO -1.22%) wowed the markets with its latest earnings update, demonstrating why it’s a powerhouse stock and one of Warren Buffett’s favorites. Despite what management acknowledged as a challenging operating environment, it reported a 6% increase in organic revenue and comparable operating margin of 35.6%, up 34.7% from last year.
The stock is clearly an excellent defensive play, as it has been for decades. That’s underpinned by its stellar dividend. Here’s how much a $25,000 investment pays annually in passive income.
Image source: Getty Images.
Coca-Cola is a Dividend King, which means that it has raised its payout annually for at least 50 years consecutively. It’s a designation that implies rock-solid reliability, and Coke has one of the longest track records at 64 years in a row. As the recent results confirm, loyal fans buy it under nearly all conditions, which is why it’s so reliable.
Historically, the dividend yields around 3%, but since yield moves inversely with the stock price, and Coca-Cola stock has been hitting it out of the park, the yield today is 2.4%.
Today’s Change
(-1.22%) $-1.09
Current Price
$88.00
Key Data Points
Market Cap
Day’s Range
$87.21 – $88.41
52wk Range
$65.35 – $90.92
Volume
7.4M
Avg Vol
17.6M
Gross Margin
63.45%
Dividend Yield
2.33%
As of the latest increase in February, Coke pays $2.12 per share in annual dividends. At the current price, $25,000 gets you 283 shares, and you would get $600 annually from your investment.
That’s not enough for retirement, but it will grow every year. It also highlights the importance of saving early, so you have enough to invest for passive income you can retire on.
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.