Coca-Cola (KO 1.11%) recently announced a 9% increase in its quarterly dividend payment from $0.28 per share to more than $0.30 per share. The annualized dividend payment has reached $1.22 per share, equivalent to around a 3.3% dividend yield. Meanwhile, Coke's global peer PepsiCo (PEP 0.74%) offers a lower dividend yield to shareholders, at only 2.9%.

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Coca-Cola's huge cash return to shareholders
Coca-Cola's long-term shareholders are quite familiar with the company's consistently rising dividend payment. This time marked Coca-Cola's 52nd consecutive quarterly dividend hike. Furthermore, more cash will be returned to its shareholders via the company's ongoing buyback program, supported by its strong cash flow generation.

In 2013, Coca-Cola generated $10.5 billion in operating cash flow, and it returned as much as $8.5 billion of cash to shareholders via both dividends and share repurchases. Out of the $8.5 billion, around $3.5 billion, or more than one-third of the total cash return, came from share buybacks. Its 2013 share-buyback amount was 15% higher than the previous year, driven by the cash inflows from a bottling business divestment. Thus, investors should expect a lower cash return in 2014.

Indeed, the company plans to increase capital investments to between $2.5 billion and $3 billion to strengthen overall brands and accelerate business growth; and the total share-repurchase amount will also be $2.5 billion-$3 billion. With the assumed $1.22 annual dividend per share and a $3 billion buyback, Coca-Cola yields 5.1% for shareholders.

PepsiCo offers a juicier cash-return yield
In contrast, PepsiCo increased both dividend payments and share repurchases by 35% to $8.7 billion in 2014. The company raised its share-buyback target by 67% to $5 billion, accounting for around 4% of its total market capitalization. Impressively, the total cumulative 10-year cash return will reach more than $60 billion after a 35% increase. With a total market capitalization of $120 billion, an $8.7 billion cash return would yield a juicy 7.2% for shareholders.

Green Mountain Coffee Roasters accelerates Coca-Cola's 2020 Vision
Coca-Cola considered 2013 an unusual and challenging year, but it stayed committed to a 2020 Vision to double its system revenue, increase system margins, and more than double servings to 3 billion-plus a day. One of its actions to realize the company's 2020 Vision was the recent global partnership with Green Mountain Coffee Roasters (GMCR.DL). Coca-Cola also bought about a 10% stake in Green Mountain for around $1.2 billion.

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Coca-Cola sees this partnership as a real game-changing innovation in the non-alcoholic beverage industry. Green Mountain, with its Keurig single-serve system, could provide Coca-Cola with a new platform for consumers to enjoy the cold beverage via in-home preparation. It also created a new distribution channel with huge growth potential. In return, Coca-Cola's global brand combined with strong distribution channels and marketing initiatives will boost Green Mountain's Keurig Cold in-house, single-serve system.

Worth holding in the long run?
Coca-Cola will deliver decent growth in the long run, driven by its global leadership position, global distribution channel, and the commitment to reach its 2020 Vision. Coca-Cola is valued at only 16.4 times its forward earnings, just a bit more expensive than PepsiCo, with a forward earnings valuation of 16. With a total forward cash-return yield of 5.1%, income investors could feel safe investing in Coca-Cola and holding this stock for the long term.