Coca-Cola (KO 1.04%) is one of the most recognizable brands on the face of the planet. It has a global presence, dominates the soft drink industry, and is an extremely durable business. These favorable traits have helped drive incredible profits over the long term. Shareholders have benefited directly from strong bottom-line performance in the form of quarterly cash payouts.
This company could command the attention of income investors. Here's how many shares of Coca-Cola stock you'd need to make $10,000 in yearly dividends.
Image source: Coca-Cola.
Coca-Cola can provide a meaningful income stream
In February, Coca-Cola's board of directors approved an increase in the quarterly dividend payout to $0.51 per share. This marked the 63rd straight year that the business bumped up this figure, a phenomenal trend that shows management's focus on returning capital to shareholders.
If an investor wanted to generate $10,000 in passive annual income from Coca-Cola stock, he or she would need to own 4,902 shares. At the current share price of $66.84, those 4,902 shares would cost roughly $327,649 to buy. The dividend yield of 3.09% is materially higher than the average dividend yield of the stocks in the S&P 500 (^GSPC -0.38%).
Shareholders aren't going to outperform the market over the long term
Coca-Cola is a very safe stock to own. As mentioned, it's extremely profitable. It has a wide economic moat. The business doesn't face any disruption. And demand remains healthy even in recessionary periods.
However, shareholders shouldn't expect its stock price performance to beat the market over the long term. The stock has dramatically underperformed the S&P 500 in the past decade.
