2 Dividend Kings That Are Trouncing the Market This Year

The S&P 500 has rebounded from earlier-year losses and is back to hitting new highs. Conventional wisdom is that growth stocks drive the market higher in good times, and safe stocks outperform when the going gets tough.

But that's not always the case. Consider that despite the market's rise this year, Walmart (NASDAQ: WMT) and Coca-Cola (NYSE: KO) are both trouncing it right now. These stocks are Dividend Kings, meaning they have increased their dividends for at least the past 50 years. They offer tremendous value in their safety and dividends, and are demonstrating strength beyond that. Here's why the market loves them.

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1. Walmart

Walmart is a simple retailer, but that's all you need to dominate as a business. It's the largest physical retailer in the world, with more than 5,000 U.S. stores and nearly 11,000 global locations. It has stores within 10 miles of 90% of the U.S. population, and since it's a discount essentials retailer, it's resilient no matter what's happening in the economy.

But it's not stagnating and relying on an old model, either. One of the reasons it's been gaining recent momentum is the growth explosion in its e-commerce business. While Walmart has only 9.2% of the market, in contrast with Amazon's 40.1%, it has gained market share over the past few years and is the second-largest e-commerce company in the country.

And though it may not catch up to Amazon, it has a structural edge over it in its physical store network. It's using its stores as distribution hubs without having to invest in creating a national fulfillment network, and having a storefront gives customers more options in delivery and pickup.

Having a strong online presence also gives it exposure to more people who may not generally come into a Walmart store, such as more affluent consumers. Walmart can feature a much larger assortment of merchandise on its website, which could appeal to a broader socioeconomic range of customers, and higher-income shoppers have accounted for a major portion of the company's recent growth. Walmart is also targeting these customers through new product lines. In the 2026 fourth quarter (ended Jan. 31), sales increased 5.6% year over year, and e-commerce was up 24%.

Walmart has raised its dividend for the past 53 years, and the market is prizing its consistency, reliability, and growing dividend right now.

Image source: Walmart.

2. Coca-Cola

Coca-Cola is the largest all-beverage company in the world, and loyal fans continue to buy their favorite Coke-labeled drinks no matter what's happening in the economy. That gives the company pricing power, and it has been able to successfully raise prices to counter increasing costs. It has also taken other actions to keep people buying, including changing product packaging and launching smaller sizes that are more affordable.

The company's bottles and cans may seem ubiquitous to Americans, but management notes that it's still a small presence globally. Although it has a major presence in developed regions, it holds only 14% of the global market share. It has an even wider opportunity in underdeveloped regions, where its market share is just 6%.

It also has opportunities in organic industry growth, new categories, and new brands. For example, it has a portfolio of about 200 brands right now, and although carbonated beverages like Coca-Cola and Sprite do a lot of the company's heavy lifting, it also has brands in the dairy, juice, and tea categories that provide excellent growth springboards. Some of its more recent acquisitions include dairy brand Fairlife and sports drink brand BodyArmor.

Since Coca-Cola is dependable in times of pressure and pays a lucrative dividend, its stock tends to outperform in challenging times. But it has continued to outpace the market this year, even as the market rebounds, since it has reported very strong performance. In the first quarter, revenue increased 12% year over year.

Coca-Cola has raised its dividend for the past 64 years, giving it one of the longest track records on the market. It also yields 2.6% at the current price, providing shareholders with growing passive income at an attractive yield as well as the opportunity for price gains.

Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.