Kimberly-Clark vs. Coca-Cola: Which Dividend Stock Is the Better Buy Now?

Investors often turn to defensive sectors when looking for stability during market shifts. Kimberly-Clark (NASDAQ:KMB) and Coca-Cola (NYSE:KO) represent two iconic choices for those seeking reliable businesses with deep global roots.

Kimberly-Clark focuses on hygiene and personal care essentials that consumers buy regardless of economic conditions. Coca-Cola dominates the global beverage landscape with a focus on brand power and high profitability. This comparison examines which stock provides a more compelling balance of growth and value today.

The case for Kimberly-Clark

Kimberly-Clark operates as a global leader in personal care and hygiene, manufacturing essential products like Huggies diapers and Kleenex tissues. The company sells these items to a wide range of retail partners, including supermarkets, drugstores, and e-commerce platforms. Its largest customer is Walmart (NASDAQ:WMT), which accounted for approximately 16% of net sales in 2025. Customer concentration like this adds a layer of risk to the business.

In its latest annual report, filed for FY 2025, revenue reached nearly $16.4 billion, representing a decrease of approximately 2.1% compared to the prior year. This revenue decline was accompanied by net income of roughly $2 billion. Despite the top-line pressure, the company showed its ability to generate profit from its consumer staples stocks portfolio.

The case for Coca-Cola

Coca-Cola is the world's largest non-alcoholic beverage company, owning brands ranging from its flagship soda to sports drinks and coffee. The company relies on a network of independent bottling partners to package and distribute its products. Starting in 2027, the company will expand its reach by replacing PepsiCo (NASDAQ:PEP) at all U.S. KFC restaurants.

In FY 2025, revenue grew by nearly 1.9% to reach approximately $47.9 billion. This growth helped the company achieve a net income of roughly $13.1 billion for the fiscal period. Coca-Cola recorded a net margin of approximately 27.3%, which highlights the strength of its global branding and licensing business model.

Risk profile comparison

Kimberly-Clark faces risks regarding the integration of its pending acquisition of Kenvue (NYSE:KVUE), which could impact financial flexibility. The company also deals with intense competition from private-label manufacturers and the rising bargaining power of large retailers. Supply chain vulnerabilities are another concern, as price volatility for materials like cellulose fiber and petroleum can erode net margins. Geopolitical instability also threatens international revenue and supply lines.

Coca-Cola is highly dependent on its network of independent bottling partners, whose financial health directly impacts the company's revenue. The beverage giant faces increasing regulatory risks, including potential taxes on sweetened drinks and stricter environmental rules for plastic packaging. Significant tax litigation with the IRS also remains a potential threat to future financial results. Furthermore, inflationary pressures and currency fluctuations can reduce consumer purchasing power in the countries where it operates.

Valuation comparison

Kimberly-Clark appears more attractively priced based on its sales multiple, while Coca-Cola commands a premium for its superior net margin and consistent growth.

Which stock would I buy?

Both stocks are Dividend Kings, showing their reliability by boosting their payouts for 50 or more consecutive years. Kimberly-Clark has increased its dividend payout for 54 consecutive years, while Coca-Cola has boosted its payout for 64 consecutive years, so Coca-Cola has an edge in that department. That said, Kimberly-Clark's dividend yields 4.8%, significantly higher than Coca-Cola's 2.2% yield, so Kimberly-Clark wins that battle.

Still, even with the higher yield, I would rather own Coca-Cola shares. While Kimberly-Clark makes everyday essentials and is a recession-resistant stock, its stock price has reflected its defensive nature, down 19.8% over the past five years compared to the S&P 500's 70.6% return over the same period. In comparison, Coca-Cola, while not known for stock price appreciation, has seen its shares pick up steam, returning 70.2% over the past five years, nearly matching the return of the broader markets. And its consistent dividend payouts have helped boost total returns.

It's finding success with offering new twists on its classic sodas, with unit case volume for its Coca-Cola Zero Sugar line growing 16% in the second quarter of 2026. In the second quarter, it also saw growth in its non-soda portfolio, with unit case volume for water, sports, coffee, and tea growing 6%. It's also implementing customer feedback into its product offerings, launching innovation hubs that "translate consumer insights into locally relevant innovations to capture more drinking occasions," according to the company's 2026 second-quarter earnings press release. With its growing ability to pair stock price appreciation with its consistent dividend payout, Coca-Cola wins this battle for me.

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