Formed in 1886, Coca-Cola (KO -1.09%) has become a household name by marketing and selling its large portfolio of beverages (including its namesake soft drink) around the world.
Beyond its popularity with consumers, however, Coca-Cola has also long been a favorite in the stock market too, thanks to its steady growth and long history of paying dividends. For investors targeting $5,000 in dividend income each year, here's how many shares of Coca-Cola stock you would have to own.
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Not just any dividend stock but a Dividend King
Coca-Cola certainly has an unwavering commitment to its dividend. Not only has the company kept up its regular payments, but it has raised them annually for more than six decades. That makes Coca-Cola a Dividend King.
The board of directors ran the payout growth streak to 63 straight years after it increased the dividend earlier this year to a quarterly rate of $0.51 per share. The new rate started with April's payout.
It doesn't look like Coca-Cola has a problem affording the higher dividend, either. The company has a payout ratio of 77%, meaning its dividend payouts over the past 12 months have added up to about three-quarter's of the company's net income from that period.
A market-beating dividend yield
With the company's commitment and ability to pay dividends settled, it's time to turn your attention to the share count needed to collect $5,000 yearly.
Coca-Cola's current $0.51 dividend works out to $2.04 per year, so 2,451 shares would be necessary to receive $5,000 total. Based on the June 13 closing price of $71.02, you'd need to invest $174,070 to own that many shares.
Given the company's track record, remember your annual dividend income should increase every year, and shareholders also receive a higher dividend yield compared to the broad market. Coca-Cola stock yields 2.9% versus the S&P 500 index's 1.3%.
