Coca-Cola has not only paid a dividend like clockwork for decades now, but has raised its per-share payout every year for the past 64 years.
These annual increases, however, haven’t necessarily been enormous.
What Coca-Cola’s dividend growth may lack in yearly increases is more than made up for in consistency and capital gains.
Most veteran investors will acknowledge Coca-Cola (NYSE: KO) is one of the market's most revered dividend stocks. But how good is it in practical terms? Specifically, how much dividend income would you have collected had you invested $4,454 in 100 shares of the beverage giant back in April 2016?
Since that point in time, Coca-Cola's quarterly dividend payments have not only continued to be made like clockwork, but have grown from $0.35 per share then to $0.53 now. During this stretch, each share dished out a total of $17.12 worth of dividend payments. Owning 100 shares of KO, therefore, would have put $1,172 worth of cash payments into your portfolio during this 10-year timeframe.
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This figure assumes you aren't reinvesting dividends in more shares of the company, of course. Had you been doing so, you'd have pocketed at least a little more.
Image source: Getty Images.
Coca-Cola's stock isn't just generating reliable, growing income, though. It's also making gains of its own. Shares have grown from a price of $44.54 then to $75.48 now. That's a 69% gain. Or, illustrated another way, had you been reinvesting all of your dividend payments for the past decade, your $4,454 investment then would be worth $9,872 now.
These numbers could be surprising to investors that may only see Coca-Cola as a boring, low-return name. There's an important takeaway regarding this growth, however. That is, even seemingly modest gains and consistent income can really add up over time. The key is trusting the process enough to continue investing money in quality companies even when it isn't easy or comfortable to do so. Clearly it's worth it, given enough time.
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James Brumley has positions in Coca-Cola. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.