Coca-Cola Just Hit an All-Time High. Here's How Much $25,000 Invested Pays Annually.
Key Points
Coca-Cola stock soared after its latest earnings results confirmed that fans buy it under all kinds of circumstances.
It has raised its dividend annually for 64 years straight.
The yield moves inversely with the stock price, and as the stock rises, the yield is below the historical average.
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Coca-Cola (NYSE: KO) wowed the markets with its latest earnings update, demonstrating why it's a powerhouse stock and one of Warren Buffett's favorites. Despite what management acknowledged as a challenging operating environment, it reported a 6% increase in organic revenue and comparable operating margin of 35.6%, up 34.7% from last year.
The stock is clearly an excellent defensive play, as it has been for decades. That's underpinned by its stellar dividend. Here's how much a $25,000 investment pays annually in passive income.
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Coca-Cola is a Dividend King, which means that it has raised its payout annually for at least 50 years consecutively. It's a designation that implies rock-solid reliability, and Coke has one of the longest track records at 64 years in a row. As the recent results confirm, loyal fans buy it under nearly all conditions, which is why it's so reliable.
Historically, the dividend yields around 3%, but since yield moves inversely with the stock price, and Coca-Cola stock has been hitting it out of the park, the yield today is 2.4%.
As of the latest increase in February, Coke pays $2.12 per share in annual dividends. At the current price, $25,000 gets you 283 shares, and you would get $600 annually from your investment.
That's not enough for retirement, but it will grow every year. It also highlights the importance of saving early, so you have enough to invest for passive income you can retire on.
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Jennifer Saibil 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.
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