In the past few years, some high-profile dividend stocks have reduced their payouts, much to the chagrin of investors. As most income seekers want to avoid this fate, they might consider turning to arguably the most elite group of dividend payers on the market: Dividend Kings.
These companies have raised their payouts for at least 50 consecutive years, an incredible feat. And many of them will likely maintain that streak for years to come. Let's consider two Dividend Kings that investors can count on to pay them for life: The Coca-Cola Company (KO +0.31%) and Abbott Laboratories (ABT 2.05%).
NYSE: KO
Key Data Points
1. Coca-Cola
Coca-Cola, a soft-drinks manufacturer, can perform well over long periods thanks to factors such as its competitive advantage and ability to adapt to changing market dynamics. Regarding the first point, Coca-Cola is one of the most famous brands in the world. There are few people who don't recognize the company's logo, and many are much more likely to buy a product that displays that logo. Coca-Cola's brand inspires familiarity and a degree of trust among hundreds of millions of consumers around the world, and that's a powerful moat.
While Coca-Cola's name is associated with soft drinks, the company has evolved with market demand. It offers a much more diversified portfolio of drinks than many realize, including almost everything from alcohol to sparkling water. Even within its lineup of soft drinks, the company offers a range of options to cater to consumers with health-related concerns. Wherever market demand lands next, Coca-Cola should be able to adapt.
We saw some evidence of the company's resilience during the early pandemic years, as sales of its products fell drastically amid government-imposed lockdown orders in many countries worldwide. However, Coca-Cola was able to navigate this headwind and has since rebounded.
Zooming out, we can see that Coca-Cola's financial results have been reliable and consistent for a long time:
KO Revenue (Annual) data by YCharts.
The future should look much the same for the beverage giant, allowing it to maintain its solid dividend program. As a Dividend King, Coca-Cola has increased its payouts for 62 straight years. Its forward yield is now 3%, while the S&P 500's average is roughly 1.3%. Coca-Cola's dividend looks about as safe as they come.
NYSE: ABT
Key Data Points
2. Abbott Laboratories
Abbott is best known for developing and marketing medical devices, some of which physicians use in critical lifesaving procedures. That grants the company an advantage since people don't stop needing medical care even in bad times -- at best, they can only postpone necessary surgeries. Abbott also operates across three other segments: nutrition, diagnostics, and established pharmaceuticals.
The company has shown how adaptable its business is in recent years. First, the pandemic disrupted Abbott's medical device business, leading to many postponed surgeries and lower revenue from this segment. The healthcare giant turned to developing and marketing COVID-19 diagnostic products, which helped keep its revenue afloat. As the pandemic receded and the company encountered issues within its nutrition business, the medical devices segment was back on track, lifting the top line in the right direction.
Abbott has several growth opportunities within its main business. None are more important than its diabetes care unit, spearheaded by the FreeStyle Libre franchise. This series of continuous glucose monitoring (CGM) systems, which help diabetics keep track of their sugar levels, has been the company's biggest growth driver recently. However, as management pointed out last year, only 1% of adults with diabetes worldwide currently have access to CGM technology.
Another unit that should help with long-term growth is Abbott's cardiovascular devices, including its structural heart portfolio and products for addressing heart failure. As the world population ages, the devices it manufactures in these areas will be more in demand.
Both the company's business and its dividend program, then, look safe. Abbott Laboratories has increased its payouts for 52 consecutive years and currently offers a forward yield of 2%. Income-seeking investors can't go wrong with this stock.
