Soft drink giant Coca-Cola (KO +2.18%) is among a rare group of companies that have raised their dividends for at least 50 consecutive years. A half-century of consistent dividend growth is a feat that only the best-run, most resilient companies can manage. Among the over 50,000 publicly traded companies globally, just 56 had earned the Dividend King crown as of December 2025.
In Coca-Cola's case, the streak has continued for 63 years. While management doesn't offer guidance on dividend growth, I see signs that the company could announce a substantial hike, perhaps in the double digits. For context, the last time Coca-Cola raised its dividend by over 10% was in 2007.
Image source: Getty Images.
Why Coca-Cola's dividend growth could roar back
For the last decade, Coca-Cola's average dividend growth was 3.94% a year. While that generally kept ahead of inflation, it still wasn't much to write home about.
| Year | Coca-Cola Dividend Hike | Inflation Rate |
|---|---|---|
| 2021 | 2.4% | 4.7% |
| 2022 | 4.8% | 8% |
| 2023 | 4.5% | 4.1% |
| 2024 | 5.4% | 2.9% |
| 2025 | 6.2% | 2.7% |
Source: Author calculations and Minneapolis Federal Reserve.
But Coca-Cola's dividend growth wasn't always so tepid. Take a look at how fast its dividend grew from 1994, the year Warren Buffett finished adding to Berkshire Hathaway's 400-million-share position, through the next four years.
| Year | Coca-Cola Dividend Hike | Inflation Rate |
|---|---|---|
| 1994 | 14.7% | 2.6% |
| 1995 | 12.8% | 2.8% |
| 1996 | 13.6% | 2.9% |
| 1997 | 12% | 2.3% |
| 1998 | 7.1% | 1.6% |
Source: Author calculations and Minneapolis Federal Reserve.
In those five years, Coca-Cola's payouts rose 76%, leaving the cumulative inflation rate of 12.8% in the dust. Compare that with the cumulative dividend growth of 25.5% for Coca-Cola since 2021, which barely keeps up with the 24.3% inflation seen in that time frame, and you can see how much momentum this company's dividend growth has lost.
Still, there are reasons to think Coca-Cola's once-vaunted dividend could get its mojo back soon.
NYSE: KO
Key Data Points
First, earnings are soaring. The company reported adjusted quarterly earnings growth of 29.8% in its most recent earnings report, compared to just 5% adjusted earnings growth a year ago in Q3 2024.
Second, Coca-Cola's operating margin has ballooned to 32%, from 21.2% a year prior. That's meaningful because it means the company is keeping a far higher percentage of revenue as operating profit (revenue minus the cost of goods sold and operating expenses). This frees up much more cash for mergers, acquisitions, share buybacks, or dividends.
Thirdly, management has repurchased nearly $1 billion in shares over the last year, as you can see below.
Data by YCharts.
Share buybacks make dividend growth easier by reducing the outstanding share count on which dividends must be paid. Management's decision to spend almost $1 billion on buybacks could reduce share count by around 14 million shares. That, combined with soaring earnings and stronger operating margins, makes it very possible that Coca-Cola could send a powerful message when it announces its (anticipated) 64th dividend increase in just a few days' time.
