Coca-Cola Has Paid Investors a Growing Dividend for 64 Straight Years. Here's the Yearly Passive Income That $2,500 Starts You With.

People often think about receiving large dividend payments regularly. But you don't need a large sum to start collecting dividend payments.

Starting with an investment of $2,500 won't produce life-altering income. But picking the right stock investment will generate dividends you can count on. Even better, you can find one that has increased payments annually.

Remarkably, Coca-Cola (NYSE: KO) has raised dividends for 64 straight years. That puts the company in an elite group called Dividend Kings, or those that have increased payments for at least 50 consecutive years.

But it's not just the company's history that makes Coca-Cola's stock an enticing investment.

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Reliable income

You can purchase 27 shares of Coca-Cola with your initial $2,5000 investment. With a $0.53 quarterly dividend, you'll receive about $57 in dividends annually. However, that figure will undoubtedly grow based on the company's long history and business strength.

That's because Coca-Cola has the means to continue increasing dividends. Along with the company's commitment, that's a powerful combination.

You can see that Coca-Cola can easily afford its dividends by looking at the company's payout ratio. That's an important metric since it compares dividends to earnings. Hence, the lower the ratio, the better. And Coca-Cola has a payout ratio of about 62%.

The underlying business

Coca-Cola's global reach and popularity of its brands drive sales and earnings growth. That's the underpinning of continuing dividends.

The company has been in existence since 1886 and sells products in more than 200 countries. Most people know about its soda sold under its namesake brand. However, the company also has other popular brands and products, including water, juice, sports drinks, and plant-based beverages. Well-recognized brands include Fanta, Sprite, Dasani, Minute Maid, and Vitaminwater.

You can see Coca-Cola's continuing global popularity by examining its results. Revenue grew across every region, largely driven by volume increases. The company's top line, adjusted to remove foreign-currency translations and the impact of acquisitions/divestitures, grew 7% year over year. That drove earnings per share 9% higher.

For all of 2026, management expects to grow revenue and earnings per share by at least 5% and 9%, respectively. That's indicative of Coca-Cola's underlying business strength and certainly not a mature company whose best days are behind it.

Of course, aside from receiving higher dividends from annual increases, you can also purchase additional Coca-Cola shares over time. One way is to invest the same amount of money at regular intervals in a strategy called dollar-cost averaging. That way, you'll build a bigger position over time, purchasing more shares when the stock price is lower and fewer at higher prices.

Lawrence Rothman, CFA 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.