With a 134-year history behind it, The Coca-Cola Company (KO 0.95%) is one of America's oldest and most respected companies. And with a 57-year history of raising its annual dividend, it's a "dividend aristocrat," and one of the better dividend payers on the stock market.

Now contrast Coke's commitment to dividends with what we see elsewhere in the market today. The financial stress of the coronavirus crisis has caused literally dozens of U.S. companies to suspend their dividends, or cancel them outright. Indeed, the first half of 2020 has seen more companies end their dividend payments than over all of the last 10 years combined.

And yet, even in an environment like this one, Coca-Cola's 3.6% dividend yield is far from the best dividend out there. If you're looking to maximize your income from dividend stocks, here are three other stocks that pay you better: HP Inc (HPQ 1.75%), Western Union (WU 0.40%), and ExxonMobil (XOM 0.02%).

Little girl fanning a wad of $100 bills

Image source: Getty Images.

HP Inc

HP Inc -- the company formerly known as Hewlett-Packard -- is coming off of a big earnings beat in Q2 2020, in which reported earnings came in 16% higher than what Wall Street had predicted. Thanks in part to office workers confined under quarantine and forced to buy computer equipment to assemble home offices on the fly, HP's profits got a nice boost despite (or even because of) the coronavirus.

Now, worried that HP might not be able to maintain its momentum, a lot of investors sold off HP stock after earnings. As of close of trading Friday, HP stock was trading back around where it was before earnings came out, but -- and this is important -- the stock isn't being given credit for its earnings beat. It hasn't gained anything since before earnings, and I think this means there's still room for these shares to run -- especially given that HP stock only costs about 8 times earnings today.

And here's where HP's generous dividend policy really makes itself felt. Ordinarily, the 7% long-term growth rate that analysts project for HP wouldn't be quite enough to justify an 8x P/E ratio (not for value investors, at least). But when you factor in HP's 4.2% dividend, the total return on this stock is more than 11% -- and more than enough to justify an 8x P/E ratio.

Compared to Coke's 3.6% dividend and 20x P/E, this makes HP stock look like an incredible bargain.

Western Union

Western Union is our second better-than-Coke dividend payer -- and coincidentally, it pays a 4.2% dividend too.

Admittedly, Western Union may seem an odd pick in a 21st century that's seen the rise of money transfer names like PayPal and Zelle. And it's true that Western Union isn't tearing up the track on growth -- earnings growth has averaged less than 5% annually over the last five years, according to data from S&P Global Market Intelligence.

Still, despite facing increasing competition from fintech upstarts, Western Union remains a leader in global payment services, boasting physical offices for sending and receiving cash in more than 200 countries and territories, a better-than-10% overall market share in international money transfer, and even greater share in important markets such as Mexico (18%). 

Its business may not be growing a lot, but at a valuation of less than 9 times earnings, the company's long-term projected growth rate of 6%, when combined with its generous 4.2% dividend yield, is enough to make this stock look cheap as well.


If you're looking for a stock paying a truly Coca-Cola-crushing dividend yield, though, look no further than oil giant ExxonMobil, whose dividend yield of 7.6% is literally more than twice what Coca-Cola pays its shareholders.

Founded in 1870, this granddaddy of oil companies has been around even longer than Coke -- and like Coke, Exxon is considered a dividend aristocrat, having consistently raised its dividend each and every year for the past 36 years.

Can Exxon keep its record alive in an era of topsy-turvy oil prices, especially given the growing popularity of electric cars that don't require gasoline to drive? Opinions differ, but when you consider that 97.5% of new cars sold last year used gasoline or diesel to power their engines, and that even optimistic estimates of the growth of the EV market predict it could be 2040 before electric car sales begin to outpace sales of cars with internal combustion engines, I'd say the future of oil still looks pretty secure. 

And consider that oil has uses more than just for fuel -- plastics, for example. True, here, too, there are long-term issues to consider, including environmentalists criticizing the use of plastic drinking straws and plastic bags. But the tens of millions of face masks, N95 respirators, and surgical gowns being manufactured for the fight against the coronavirus right now? They're mostly manufactured from polypropylene -- produced from oil and natural gas inputs -- and that's not something you can get out of a solar panel.

With multiple uses for its products, I suspect ExxonMobil will still be producing oil and paying superior dividends for decades to come.