Check out the latest Coca-Cola earnings call transcript.

Coca-Cola (KO 0.46%) has long been a favorite name among dividend investors and for a number of outstanding reasons. Not only has this iconic beverage company raised its dividend payout for 56 consecutive years, but its current yield of 3.28% is among the richest within the entire consumer goods space.

However, there are a few top stocks that offer even richer yields than this Dividend King. Hanesbrands (HBI -1.84%), Target (TGT -0.39%), and AbbVie (ABBV -0.80%), for instance, all sport substantially higher yields than Coca-Cola. Should income investors add these three dividend stocks to their portfolios right now? Read on to find out.

A plant growing out of a pile of coins.

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Big yield at a big discount

Keith Noonan (Hanesbrands): Clothing and apparel company Hanesbrands had a challenging year in 2018. Despite momentum for the company's Champion brand and progress expanding its international business and direct-to-consumer imprint, slowdown for socks and underwear and signs of increased threats from private-label, retailer-specific brands created dynamics that sent the stock tumbling. Uninspiring earnings results and Target's decision not to renew its contract with Hanesbrands for an exclusive athleisure clothing line helped push the stock down nearly 40% over the last year, and shares now trade at less than 7.5 times this year's expected earnings and pack a 4.6% dividend yield.

Hanesbrands dividend yield is higher than it's ever been, and recent movement on the stock suggests that the prevailing view on the company is that it will continue to decline in the highly competitive clothing industry due to commoditization and threats from private-label retail brands and e-commerce. Like any business, Hanesbrands will have to adapt to challenges and shifts in its industry, but the current read on the stock appears overly pessimistic. Total sales for the Champion brand climbed 30% year over year last quarter, direct-to-consumer sales rose 15%, and the company is continuing to reduce operating expenses. 

It's worth pointing out that Hanesbrands hasn't raised its payout since 2016, choosing instead to use cash flows to pay down debts from its recent acquisitions push, but the company has tripled its dividend over the last five years and its payout ratio suggests that investors shouldn't be concerned about a payout cut or suspension. Amid the challenges, there's some positive momentum at the company, and its low earnings multiples and big yield should make it a candidate for value- and income-focused investors.

Check out the latest Hanesbrands earnings call transcript.

A reliable retailer

Jeremy Bowman (Target): Coca-Cola is hard to beat as a dividend stock. The company has been paying increasing dividends for 56 years, making it a rare Dividend King, and is a global giant with a number of timeless brands, including its namesake soft drink. Today, Coca-Cola offers a solid dividend yield at 3.3%, but another reliable, consumer-focused dividend payer investors may want to consider is Target.

Like Coca-Cola, Target is a Dividend Aristocrat, having raised its dividend payout every year for the last 44 years, and it offers a better yield today than Coke, at 4%. Target is also cheaper than Coke, at a P/E of just 11.6, compared to 22.9 for the beverage giant, and Target appears to have better growth prospects as the company is investing in new, small-format stores and e-commerce. It's also benefiting from the bankruptcy of rivals like Toys R Us, Sears, and Bon-Ton Stores.

Target is also making the most from the strong momentum in the booming consumer economy and its own strategic initiatives, with comparable sales jumping 5.3% in its most recent quarter. 

Retailers are generally trading at a discount today as the market is skeptical of their future given the upheaval from the threat of e-commerce, but Target is increasingly looking like it will be a winner from the industry transformation as its own e-commerce business is growing quickly -- up 49% in the third quarter -- thanks in part to its acquisition of Shipt a year ago and a store footprint that helps it enable fast delivery and multiple pickup options.

Finally, dividend investors can take comfort in knowing that Target's payout ratio is much lower than Coca-Cola's -- at 49% compared to 76% -- which means the retailer has plenty of room to raise its payout even if profit growth is slow.

Check out the latest Target earnings call transcript.

A cheap, high-yield dividend

George Budwell (AbbVie): Not many companies can stand toe-to-toe with Coca-Cola from a dividend standpoint. But AbbVie, a large-cap biopharma, may have what it takes. After all, AbbVie offers a far richer yield than Coca-Cola (4.51% vs. 3.28%) at current levels, as well as a considerably more attractive payout ratio (67.8% vs. 210%). AbbVie's total return on capital has also markedly outperformed that of Coca-Cola's since the company became an independent entity in 2013.

ABBV Total Return Price Chart

ABBV total return price data by YCharts.

However, AbbVie's stock is clearly more risky than Coca-Cola's. Turning to the specifics, this blue chip is currently dealing with the loss of exclusivity for its megablockbuster arthritis medicine Humira over in Europe, as well as the failure of its high-value cancer therapy known as Rova-T. Fortunately, the drugmaker has taken a number of steps to move beyond Humira's loss of exclusivity in key geographies and soften the impact of Rova-T's unexpected clinical setback.

AbbVie, for instance, has successfully built out a high-growth blood cancer franchise that already sports two top drugs in the field: Imbruvica and Venclexta. The drugmaker should also be able to offset a good chunk of Humira's declines with the successful development of its next-generation immunology medicines, such as upadacitinib and risankizumab. AbbVie thus has the pieces in place to not only survive these two key headwinds, but to keep delivering top-notch growth and shareholder rewards as well. 

In all, AbbVie's stock has an outstanding dividend program in place that compares well to even the best in the business. The company's biggest risk factors also appear to be under control, thanks to its robust and highly diverse clinical pipeline.

Check out the latest AbbVie earnings call transcript.