Nike Now Yields More Than Coca-Cola. Which Dow Dividend Stock Is the Better Buy in July?

With the cost of living rising, more investors are recognizing the importance of generating income through dividend stocks. After all, those income payments can provide an extra cushion in retirement.

That's why Nike (NYSE: NKE) is receiving increased attention. With a yield of 4% as of this writing, it's paying out more than Coca-Cola (NYSE: KO), a long-term holding for many dividend investors. The beverage maker is a Dividend King, earning that title by increasing its dividend payout for more than 50 consecutive years.

But as you'll see in a minute, there's a reason to look at more than just Nike's yield when making an investment decision.

Image source: Getty Images.

The appeal of an iconic brand

When the Air Jordan was launched in 1985, it turned owning a pair of Nike shoes into a status symbol. In recent years, however, the cool factor around Nike has started to disappear.

Consumer tastes have changed, and Nike has been criticized for relying too much on past success rather than innovation. The company also made it more difficult to find and buy its shoes, as it relied on a direct-to-consumer model rather than working with wholesale partners. Inventory has also built up, and Nike has had to rely on price cuts to move excessive merchandise.

The stock price has suffered all along the way. As of this writing, it is down more than 70% over the past five years and has dropped 35% this year alone.

The company is still trying to execute its turnaround plan, but it had a few bright spots in its recent earnings report. When Nike reported its fourth-quarter 2026 earnings, it beat expectations for both revenue and earnings per share. Even though sales slumped in China, it still reported $1.3 billion in sales in the country, beating expectations of $1.2 billion.

Always counting on Coca-Cola

It's not in the most exciting of businesses, but Coca-Cola does offer consistency. Over the past 64 years, it has consecutively increased its dividend payouts. One company that understands the power of that consistency better than anyone is Berkshire Hathaway.

Warren Buffett began buying shares of Coca-Cola in 1988, and Berkshire currently owns a 9.3% stake in the company. With this investment, Berkshire is generating hundreds of millions of dollars every quarter in dividends from Coca-Cola.

While it is better known for its dividend payouts than for stock price appreciation, Coca-Cola has performed well thus far in 2026. That's in part due to success with organic sales, rather than just increasing prices. In its 2026 first-quarter earnings, Coca-Cola reported 13% growth in unit case volume for its Coca-Cola Zero Sugar brand, a 5% increase in water, and an 8% increase in tea.

As of June 30, shares of Coca-Cola are up 16.2% in 2026, beating the 9.5% return of the S&P 500.

The winner for July and beyond

A higher yield makes Nike intriguing, but yield alone doesn't make it an automatic buy, given the volatility its stock price can face. Its turnaround is still underway, as evidenced by its Q4 2026 results. While it had some wins in that quarter, revenue in North America, Nike's largest market, fell short of expectations.

At this point in time, an investment in Nike is centered more on the company reversing its missteps and losses from the past several years, rather than being an income investment. That's because the dividend yield won't matter much if the stock keeps slumping lower. The Nike stock price could offer more upside than Coca-Cola's if the company can execute its turnaround plan, but that also means taking on additional risk as a shareholder, as there's no guarantee the turnaround will work.

In comparison, Coca-Cola is a steadier performer and has proven itself more as a dividend investment, with 64 years of consecutive dividend increases. More aggressive investors may favor Nike, but Coca-Cola offers the reliability that many may be seeking for a more stable income.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.