1 Great Dividend You Can Buy Right Now

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Dividend stocks are everywhere, but many just downright stink. In some cases, the business model is in serious jeopardy, or the dividend itself isn't sustainable. In others, the dividend is so low, it's not even worth the paper your dividend check is printed on. A solid dividend strikes the right balance of growth, value, and sustainability.

Today, and one day each week for the rest of the year, we're going to look at one dividend-paying company that you can put in your portfolio for the long term without too much concern. This isn't to say that these stocks don't share the same macro risks that other companies have, but they are a step above your common grade of dividend stock. Check out last week's selection.

This week, we're not beating around the bush. Instead, we'll take a look at the No. 1 most valuable brand in the world, according to InterbrandCoca-Cola (NYSE: KO  ) .

Emerging market woes
Let me begin by stating that you'll find quite a selection of solid dividend-paying companies in the beverage sector. Many of these brand names offer a diverse portfolio of brands that offer consistent cash flow and are usually impervious to wild swings, even during deep recessions. This means that you probably can't go wrong -- and I wouldn't fault you -- owning either of Coke's closest competitors, PepsiCo. (NYSE: PEP  ) or Dr. Pepper Snapple Group (NYSE: DPS  ) . But, based on recent earnings results and trends from this trio, it's Coca-Cola, once again, that stands out from the pack.

Dr. Pepper Snapple's third-quarter results were less than inspiring. The beverage maker, responsible for Snapple among other brands, reported flat year-over-year sales, including negative currency effects, but needed a 4% rise in prices to balance out a 3% decline in volume. PepsiCo. fared much better when it recorded a 5% jump in organic net revenue growth and a 1% rise in volume. This was a pleasant change for Pepsi, which struggled overseas in 2011, while Coke flourished; but it still has some catching up to do.

Coca-Cola, on the other hand, continued its mastery of the beverage markets in the third-quarter, as it's been successfully doing for decades. Total volume growth was stronger at Coca-Cola, rising 4%, than its peers, with international volume rising faster than domestic by a margin of 5% to 2%. This is worth noting because spending in Europe is down, and many multinationals have struggled to generate growth in emerging markets. Every sector, from tech with IBM (NYSE: IBM  ) , which witnessed emerging market growth slow down, to pharmaceuticals like Pfizer (NYSE: PFE  ) , which noted weaker Prevnar vaccine sales in emerging markets, have seen weakness overseas. Yet, Coca-Cola continues to sell more and use its pricing and brand power to drive margins.

The secret formula of success
One of the key points to Coke's success is its reliance on a diverse portfolio of products. As I noted in April, when I chose Coca-Cola as a must-have for your IRA, its portfolio possesses 15 of the 33 non-alcoholic brands that bring in in excess of $1 billion in revenue each year. Furthermore, 94% of people surveyed worldwide recognize the Coca-Cola logo, and it would take you more than nine years to sample every beverage that Coke makes if you drank a new one each day. You can actually find more facts regarding Coke's dominance by checking out a recent article from Business Insider.

What this means for Coke shareholders is that problems in one beverage line, or a slowdown in a particular region, aren't crippling to the company. Consider that in comparison to energy-drink maker Monster Beverage (NASDAQ: MNST  ) , which practically caused shareholders to have a coronary over the past few months after the company disclosed a lawsuit over a 14-year old girl's death and subsequent FDA inquiry into the safety of its energy drinks. Coke doesn't have these worries thanks to its geographic and product line diversity.

The real monster
But, let's face facts -- the real reason investors love Coca-Cola is that it delivers for shareholders in the income column. Coke boasts the 12th longest streak in the entire market, having raised its annual dividend for 50 consecutive years. Have a look for yourself at the enigma that is Coca-Cola:

Source:, figures adjusted to reflect recent stock split.

As you can see from the above, Coke's dividend is about as safe and consistent as they come. Since 2000, Coke's dividend has grown by an average of 9.6% per year -- a sizable amount considering just how large of a company Coca-Cola is. Furthermore, its payout ratio is just 51% of expected full-year earnings, meaning it's not only sustainable, but likely to head even higher.

Foolish roundup
Sometimes, the most boring and well-known companies do indeed make the best investments -- and that's precisely my advice when it comes to Coca-Cola. It has broad-based appeal, incredible pricing and recognition power, and a proactive and trustworthy management team that's capable of shifting the company's beverage lines into regions with higher growth prospects. Currently yielding 2.7% and boasting a half-century long streak of annual dividend increases, I see no reason why I can't claim Coca-Cola as one of the greatest dividend stocks in existence.

Can anything cause Coca-Cola's growth to fizzle out? Get the full scoop by getting your copy of our latest premium research report on Coca-Cola. Packed with in-depth analysis on the opportunities and threats facing Coke -- and complete with a year of regular updates -- this report will give you the tools needed to make smart long-term investing decisions. Click here to learn more.

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