My Top Dividend Stock to Buy in July and Hold Forever
Key Points
Coca-Cola stock is outperforming the S&P 500 and still offering a high forward dividend yield of about 2.6%.
The beverage maker has grown its dividend for 64 consecutive years, and increased it by nearly 4% this year.
One risk to watch is that the company's large brand portfolio could dilute the value of its best performers.
- 10 stocks we like better than Coca-Cola ›
Coca-Cola (NYSE: KO) is my top dividend stock to buy right now due to its strong brand power, long record of dividend growth, and above-average yield.
Shares are up 18% year to date, outperforming the S&P 500's roughly 10% return. The stock still yields close to 2.6% based on its quarterly dividend of $0.53 per share, making it a solid dividend stock to consider right now.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
Over the past year, Coca-Cola generated nearly $50 billion in revenue and $12.5 billion in free cash flow, and paid out nearly $11 billion in dividends to shareholders. It raised its dividend 3.9% in February, marking 64 straight years of increases.
Despite high inflation hurting consumer spending, the company has reported 20 consecutive quarters of market share gains. This is a testament to its brand strength, with 32 brands contributing $1 billion in annual revenue.
However, one risk to watch is Coca-Cola stretching itself too thin. It manages over 200 brands. The upside of this strategy is that it can make it easier for management to meet demand across many occasions and price points, thereby maintaining steady revenues. The downside, however, is that it risks diluting its best-performing brands and returns on capital in the long run.
That said, the beverage industry is fairly resilient to broader macroeconomic headwinds. Coca-Cola owns dozens of valuable brands that are contributing to its free cash flows and growing dividends. The stock's above-average yield indicates solid value for income investors.
Should you buy stock in Coca-Cola right now?
Before you buy stock in Coca-Cola, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Coca-Cola wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $410,833!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,208,693!*
Now, it’s worth noting Stock Advisor’s total average return is 917% — a market-crushing outperformance compared to 209% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of July 8, 2026.
John Ballard has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
