When you think of Coca-Cola (KO 0.46%), you may first think of a glass filled with an ice-cold bubbly beverage. But, after that, another image might be quick to pop into your head. And that's the one of passive income filling up your portfolio. That's because Coca-Cola is not only a classic beverage but it's also a classic dividend stock. In fact, Coca-Cola has increased these payments for more than 60 years.

Coca-Cola also gained dividend fame thanks to billionaire investor Warren Buffett. At the helm of Berkshire Hathaway, he started investing in the beverage maker in the late 1980s and has held on since. Still, Coca-Cola isn't alone in the world of dividend stocks. And some offer bigger payments per share or higher dividend yields. So, is Coca-Cola still a great dividend stock? Let's find out.

Part of the big picture

First, it's important to keep in mind that dividends should be part of the big picture. You shouldn't buy Coca-Cola for dividends only. It's essential to understand the business and be optimistic about Coca-Cola's future if you aim to invest in the shares.

We'll talk a bit about the business now. Coca-Cola isn't a high-growth young company, as you probably already know. It's a long-established player that sells its products in more than 200 countries. Coca-Cola also sells a lot more than just its flagship beverage. Its portfolio includes hydration products, coffee and tea, water, juice, nutrition beverages and more. You'll easily recognize brands including Minute Maid, Dasani, and Sprite.

Coca-Cola has increased revenue and profit over time -- into the billions of dollars. In recent years growth hasn't been tremendous. But the company's brand strength has helped it weather the storm of higher inflation and general economic troubles.

In the most recent quarter, net revenue rose 5%, and global unit case volume advanced 3%. Earnings per share even increased in the double digits. These gains came even as Coca-Cola raised prices. This is thanks to the company's brand strength and ability to adapt to what certain markets want.

Moving forward, Coca-Cola's prospects are bright. Even if this isn't a major growth story, Coca-Cola still should continue gains over time. And it could see more growth in emerging markets, where potential remains high.

Now, let's move along to the subject of dividends. Coca-Cola paid Buffett's Berkshire Hathaway more than $700 million in dividends last year. That's up from $75 million in 1994. And Buffett said increases always have come "just as certain as birthdays."

A Dividend King

Most of us don't have the investment resources to lead to that big of a dividend payment. But we still can grow our money by investing in companies that believe in boosting dividends annually. Coca-Cola is part of the elite Dividend Kings list. Companies on the list have lifted their dividends for at least the past 50 years. This shows they're committed to this sort of policy. So, there's reason to believe it will continue.

And here's more evidence that Coca-Cola may continue raising its dividend. The company's cash dividend payout ratio shows it's paid out 79% of its free cash flow in dividends over the past year. And free cash flow has climbed 88% over the past five years -- to more than $9 billion. So Coca-Cola clearly has the resources to continue dividend growth.

KO Free Cash Flow Chart

KO Free Cash Flow data by YCharts

At $1.84 per share, Coca-Cola's dividend isn't the highest among dividend stocks. But its yield of 3.07% tops the average 1.98% of the beverage industry, according to NYU Stern Business School data. And you can count on Coca-Cola for dividend growth. At the same time, its brand strength and strategy have driven earnings gains even during rough economic times. That's why Coca-Cola still looks like a great dividend stock to buy.