Coca-Cola (KO +0.59%) is one of the most well-known consumer-facing businesses on the face of the planet. It has been around forever. Its products are sold in 200 countries. And a whopping 2.2 billion servings of its drinks are consumed every day. There aren't many companies with this kind of reach and adoption.
In the past decade, Coca-Cola's share price has climbed by just 82% (as of Feb. 18), which isn't going to draw the attention of investors seeking outsized capital growth. However, this business loves to return cash to shareholders.
Does this make Coca-Cola the ultimate dividend stock to buy now and hold forever?
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Coca-Cola's incredible streak is set to continue
In February 2025, Coca-Cola's Board of Directors decided to once again hike the dividend. The quarterly payout, currently at $0.51, was increased for the 63rd straight year.
"We continue to be very proud of the 63-year track record of growing the dividend, and we are supportive of that trend continuing," CFO John Murphy said on the fourth-quarter (Q4) 2025 earnings call.
On Thursday, Coca-Cola announced it was increasing its dividend from $0.51 to $0.53 per share, a 4% increase and the 64th consecutive annual raise.
Coca-Cola is considered a Dividend King, which is any company that has increased its payout to shareholders for at least 50 successive years. And the stock's dividend yield of 2.48% is much higher than the 1.15% average for the S&P 500 index.
Berkshire Hathaway has had a position in Coca-Cola since 1988. As of Dec. 31, the Warren Buffett-led conglomerate owned 400 million shares. This stake alone generates $816 million in annualized passive income for the Oracle of Omaha's company.
NYSE: KO
Key Data Points
Minimal downside risk
In 2025, Coca-Cola reported $11.4 billion in adjusted free cash flow. This is a highly profitable business that is in a strong financial position. Soft drinks lend themselves to small, repeat purchases that aren't influenced by macro forces. This results in steady demand, reducing cyclicality.
Coca-Cola's success is credited to the brand, which supports customer loyalty and long-term company success. There is also a minimal threat of disruption or obsolescence, which makes Coca-Cola stand out when compared to rapidly changing tech industries.
The business is extremely predictable. And that means that Coca-Cola might be one of the safest companies any investor can add to their portfolios. These factors make it an ideal blue chip stock to view as a forever holding.
But even though the downside is protected, investors should think again if they believe they can achieve market-beating returns. Coca-Cola is in a very mature state. Revenue and earnings won't grow meaningfully over time.
