Investors often make the process of finding stocks more complicated than it needs to be. Rather than hunting for a tiny hidden gem that Wall Street isn't noticing, investors can get excellent returns just by picking stocks representing already established businesses with dominant market shares. The phrase "winners keep winning" comes to mind.

Few companies have a more dominant industry position than Coca-Cola (KO), which sells billions of its beverages each day. The company pays a meaty dividend that amplifies returns, as well. And the best news is that you can own the stock for what amounts to a steal at today's prices.

Sparkling growth for this beverage giant

Coke is on strong growth footing today. Sure, sales volumes were sluggish in the most recent quarter as consumers scaled back on spending, compared to a year earlier. Yet Coke has still boosted organic revenue by 11% over the past six months, allowing management to raise its growth outlook in late July.

There's also plenty of evidence of the type of pricing power that supports strong long-term stock returns. Coke passed along all its higher costs as prices rose 10% year over year in Q2. Gross profit margin is up and operating profit margin improved to 32% of sales from 31% a year earlier. Compare that result to PepsiCo (PEP -0.62%) and its 13% operating margin for confirmation that this beverage business is unusually efficient.

Coca-Cola has the cash to support its dividends

Coke management said it expects the company to generate about $11 billion of operating cash flow this year alone. Its projected capital expenses, meanwhile, are less than $2 billion. The big gap between these figures is a positive sign for income investors.

Coke paid nearly $8 billion in dividend payments in 2022 and can easily boost that payout this year and beyond. The company's efficient enterprise has allowed for 60 consecutive annual dividend hikes, and strong cash flow points to another solid increase for fiscal 2023.

With the stock sitting at less than $60 per share today, down slightly in 2023, that dividend yield is over 3%. For context, PepsiCo is yielding 2.7%.

Outlook and price

CEO James Quincey and his team raised the 2023 growth outlook in late July. Coke management now projects organic annual sales gains of between 8% and 9% on top of last year's 16% surge. The company entered the year forecasting growth of between 7% and 8%, but solid demand trends through June sparked an upgrade.

The earnings picture received a similar boost. Rather than rising by between 4% and 5%, Coke now sees profits heading higher by 5% to 6%. "The strength of our first half results and the resiliency of our business give us the confidence to raise our 2023 guidance," Quincey told investors.

Despite all of that good news, Coke's stock became cheaper in 2023. Shares are down 9%, making the company among the weakest performers on the Dow Jones Industrial Average. The beverage giant's price-to-sales ratio slipped from about 6.6 to 5.7 this year, and its price-to-earnings ratio declined from 28 to 24.

These declines don't make sense, given Coke's improving market share and strong finances. However, they do provide a more attractive price for investors seeking a dividend stock to add to their portfolios.

Yes, Coke isn't likely to shock Wall Street with huge earnings growth in any given year. Over time, though, its steadily rising annual profits and dividends should support market-beating overall returns for patient investors.