Is Coca-Cola Still the Ultimate Dividend Stock to Buy Now and Hold Forever?

Coca-Cola (NYSE: KO) is one of the most well-known consumer-facing businesses on the face of the planet. It has been around forever. Its products are sold in 200 countries. And a whopping 2.2 billion servings of its drinks are consumed every day. There aren't many companies with this kind of reach and adoption.

In the past decade, Coca-Cola's share price has climbed by just 82% (as of Feb. 18), which isn't going to draw the attention of investors seeking outsized capital growth. However, this business loves to return cash to shareholders.

Does this make Coca-Cola the ultimate dividend stock to buy now and hold forever?

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Coca-Cola's incredible streak is set to continue

In February 2025, Coca-Cola's Board of Directors decided to once again hike the dividend. The quarterly payout, currently at $0.51, was increased for the 63rd straight year.

"We continue to be very proud of the 63-year track record of growing the dividend, and we are supportive of that trend continuing," CFO John Murphy said on the fourth-quarter (Q4) 2025 earnings call.

On Thursday, Coca-Cola announced it was increasing its dividend from $0.51 to $0.53 per share, a 4% increase and the 64th consecutive annual raise.

Coca-Cola is considered a Dividend King, which is any company that has increased its payout to shareholders for at least 50 successive years. And the stock's dividend yield of 2.48% is much higher than the 1.15% average for the S&P 500 index.

Berkshire Hathaway has had a position in Coca-Cola since 1988. As of Dec. 31, the Warren Buffett-led conglomerate owned 400 million shares. This stake alone generates $816 million in annualized passive income for the Oracle of Omaha's company.

Minimal downside risk

In 2025, Coca-Cola reported $11.4 billion in adjusted free cash flow. This is a highly profitable business that is in a strong financial position. Soft drinks lend themselves to small, repeat purchases that aren't influenced by macro forces. This results in steady demand, reducing cyclicality.

Coca-Cola's success is credited to the brand, which supports customer loyalty and long-term company success. There is also a minimal threat of disruption or obsolescence, which makes Coca-Cola stand out when compared to rapidly changing tech industries.

The business is extremely predictable. And that means that Coca-Cola might be one of the safest companies any investor can add to their portfolios. These factors make it an ideal blue chip stock to view as a forever holding.

But even though the downside is protected, investors should think again if they believe they can achieve market-beating returns. Coca-Cola is in a very mature state. Revenue and earnings won't grow meaningfully over time.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.