Coca-Cola Earnings Are in. 3 Reasons Why the Dividend Stock Just Hit an All-Time High.

Long viewed as a defensive consumer staples stock, Coca-Cola (NYSE:KO) is showing that sometimes it pays to be safe, especially if you can outperform once in a while.

Following its second-quarter earnings results, released early on July 28, the stock rose roughly 5%. This year, Coca-Cola stock is up nearly 28%, outperforming many major market indexes and even some of the most prominent artificial intelligence stocks.

Coca-Cola is also one of the strongest dividend stocks in the entire stock market. Having paid and raised its annual dividend for 64 consecutive years, Coca-Cola is a Dividend King with a trailing yield of 2.4%.

Here are three reasons why this dividend stock just hit an all-time high.

Image source: The Motley Fool.

Excellent results despite a challenging operating environment

In the second quarter, Coca-Cola reported adjusted earnings per share of $0.97, beating Wall Street consensus estimates by $0.04. Revenue of $13.38 billion came in $220 million ahead of estimates.

Additionally, Coca-Cola’s management team raised its full-year guidance. The company is now guiding for adjusted earnings per share growth of 9% to 10%, up from a prior guide of 8% to 9%.

Coca-Cola is now also expecting 5% organic revenue growth, up from a previous guidance range of 4% to 5%.

The results are impressive, given that many consumers are feeling the pressure from higher prices and economic challenges that have persisted since the pandemic.

Coca-Cola has also effectively managed the steel and aluminum tariffs implemented by President Donald Trump last year, which remain in effect.

Organic growth across all markets

The strong earnings results came from organic quarterly revenue growth in all of Coca-Cola’s markets from Asia Pacific (2%) to North America (7%). Collectively, the company generated 6% organic revenue growth in the quarter.

Coca-Cola’s CEO Henrique Braun noted that trademark Coca-Cola volume growth of 5% in the quarter is the strongest volume seen in 17 years, excluding the recovery from COVID-19. Powerade also grew global volume 8% in the quarter.

Braun attributed the strength to the company’s marketing work around the FIFA World Cup.

“First, on becoming more consumer-centric, the 2026 FIFA World Cup is a great example of how we are leveraging the four I’s: insights, innovation, intimacy, and integration, to build capability for the long term,” Braun said during the company’s earnings call. “We entered the tournament with a stronger foundation and greater system alignment, allowing us to bring the activation to life with more speed, precision, and scale.”

Success outside sugary soda

As consumer preferences have shifted, particularly toward health-conscious beverages, Coca-Cola has adapted as well, acquiring and developing additional beverage brands to meet consumers where they are.

Brands outside of the more traditional sugary soda drinks delivered strong results in the quarter.

For instance, Coca-Cola Zero Sugar case volume grew 16%; Diet Coke grew 7%; and water, sports, coffee, and tea grew 6%.

Braun said the company’s strategy remains focused on “driving more from more markets and more from more brands.”

The company is also leveraging its marketing prowess to reposition brands.

For instance, the company recently revamped its marketing for Coca-Cola Zero Sugar, which has zero sugar and caffeine, as a relaxing drink for nighttime, a strategy that Braun sees as an “untapped opportunity.”

Bram Berkowitz 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.