Coca-Cola (KO -0.10%) is about as close to a perfect dividend stock as investors are likely to find. The beverage titan dominates a huge global industry that's expanded through every part of the economic cycle for decades. Those characteristics help explain why the soda maker's streak of dividend raises stands at an astounding 57 consecutive years.
There aren't many dividend stocks on the market that can challenge that record, but a few income investments do rank higher than Coca-Cola when it comes to yield and the potential for faster payout growth. Let's take a closer look at three such stocks.
1. Delivering strong cash flow
UPS (UPS 0.73%) stock has been under pressure in 2019 as investors fret about the potential for disruption in the package delivery business. The good news is that this pessimism has helped push the dividend yield to significantly above Coke's 3%.
Meanwhile, UPS' latest earnings report suggests it is finding plenty of ways to capitalize on its massive global delivery network. Revenue rose 5% in the fiscal third quarter thanks to strong volume gains in the core U.S. segment. Management's recent investments appear to be paying off, too, as profitability expanded across all three business divisions.
Its strong cash flow helped support a 6% dividend hike for 2019 and that improving earnings profile should support similarly aggressive payout boosts over the next few years.
2. Off-price retailing is profitable
Off-price retailer TJX Companies (TJX 0.64%) doesn't pay as high of a yield as Coca-Cola does today. But income investors still have a few good reasons to prefer buying that stock.
The retailer's dividend is growing much faster, for one. CEO Ernie Herrman and his team increased the payout by 18% this year following a 25% hike in 2018. Coke's last annual boost was less than 3%.
TJX Companies' business is notably stable, too, even in comparison to the beverage giant's recession-proof operations. The retailer has managed higher sales in each of the last 23 years, a period that includes both booms and busts, along with major disruptions in the apparel and home goods shopping niches.
Finally, TJX Companies could see robust sales growth over the next decade. Executives see room to greatly expand the store base just in established markets like the U.S., Canada, Europe and Australia. Even modest success here, plus steady growth at existing TJ Maxx and Marshalls locations, would support continued market-thumping dividend gains for income investors.
3. Selling more diapers
Kimberly Clark (KMB 0.82%) understands as well as Coca-Cola does just how valuable leading brands can be in the consumer staples industry. The owner of the Kleenex tissue and Huggies diaper franchises has leaned on its prime market positioning to deliver steady, if not robust, returns to investors. Kimberly Clark has paid a quarterly dividend since 1935 and has raised that payout in each of the last 46 years.
The dividend stock's yield is just a shade higher than Coca-Cola's, but investors might still like this business for its rebound potential. Sales gains recently set a three-year high and profits are surging in 2019 thanks to the combination of an aggressive restructuring plan and falling commodity costs. Yes, these top and bottom-line metrics both trail rival Procter & Gamble (PG -0.07%), which is posting its best growth in over a decade. However, a rising industry tide promises to lift both competitors while supporting Kimberly Clark as it marches toward its 50th annual dividend increase.