Better Stock to Buy Right Now: Altria vs. Coca-Cola

If the only thing you considered was dividend yield, Altria (NYSE: MO) with its 6.3% yield would easily beat Coca-Cola (NYSE: KO) with its relatively meager 2.7%. Notably, both companies are Dividend Kings, with over 50 consecutive years' worth of annual dividend increases. Don't let Altria's impressive dividend record and high yield tempt you; Coca-Cola is probably the better choice for most long-term dividend investors.

Altria is facing a big problem

Altria may be a Dividend King and a consumer staples company, but those two facts don't mean it has a low-risk business. The company's primary product is cigarettes. Nicotine is addictive, so it has very loyal customers. However, broadly speaking, smoking has been falling out of favor in the company's North American market. The volume of cigarettes Altria sells has been falling for years, with a troublingly large drop of 10% in 2025.

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It has been looking for businesses to replace cigarettes, including nicotine pouches, vaping, and marijuana. But so far, it hasn't really found a way to offset the ongoing volume declines other than continually raising cigarette prices. And missteps in its efforts to diversify have resulted in billions of dollars in write-offs. Altria continues to generate strong cash flows, but the core business is struggling. In other words, the dividend yield is high for a reason. Conservative dividend investors should probably avoid this high-yield tobacco stock.

Coca-Cola is chugging right along

Coca-Cola's yield is much lower, but this globally dominant consumer staples business is faring very well. Despite a consumer shift toward healthier food options and belt tightening in the face of economic worries, the company was able to increase case volumes by 1% in 2025 and organic sales by 5%. Basically, consumers like Coca-Cola's brands and keep buying them regardless of what is happening in the world around them.

That's a level of success that Altria simply isn't achieving with its customers. Meanwhile, Coca-Cola is rock solid financially, with an investment-grade credit rating and a reasonable payout ratio of roughly 66%. Simply put, it appears that there is little risk of a dividend cut with Coca-Cola in either the short-term or the long-term.

Be careful with the dividend risks you take

There's no immediate risk that Altria's dividend will be cut. However, if you are a long-term investor, the company's most important business is in very clear decline. Sure, it's a consumer staples company, but that alone isn't enough to make its lofty yield a worthwhile risk. Most dividend investors, particularly conservative ones, will be better off with Coca-Cola's lower yield, given its far stronger business.

Reuben Gregg Brewer 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.