About 472 shares would generate $1,000 a year in dividend income.
Coca-Cola posted a 28% profit margin over the past year, supporting dividend payments.
A focus on affordability drove a 5% increase in unit case volume in the third quarter of 2026.
Coca-Cola (NYSE: KO) has raised its dividend for 64 consecutive years. That's the kind of consistency you want to look for to earn a reliable annual income. For investors who want $1,000 a year, the math is simple.
Coca-Cola raised its quarterly dividend by 4% earlier this year to $0.53 per share each quarter, or $2.12 a year. At the share price of $92, as of midday trading on Oct. 27, 2026, that works out to a yield of 2.3%. Earning $1,000 annually would require about 472 shares, or about $43,500.
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Investors can rely on that dividend every year thanks to Coca-Cola's brand power and profitable business model. It owns 32 brands, each generating $1 billion in annual sales, and it mainly sells concentrate syrup to bottlers to make the finished product, resulting in above-average margins.
Concentrate operations made up 85% of the company's unit case volume in 2025. With bottlers picking up the tab for factory maintenance and other capital-heavy expenditures, Coca-Cola can generate higher margins. Its profit margin was 28% over the past year, and it paid out 62% of trailing earnings as dividends.
It continues to work on improving margins. During a September 2026 Barclays conference, CEO Henrique Braun said Coca-Cola has scaled back from 500 brands to less than 200 since the pandemic. With margins higher than five years ago, it is apparent that management prioritized keeping the most profitable brands.
Image source: Getty Images.
The main near-term risk is a squeezed shopper due to elevated interest rates and inflation. Coca-Cola's answer has been to focus on keeping its products affordable, which led to another strong quarter of volume growth in the third quarter, with unit case volume up 5% year over year for the second straight quarter.
With 64 straight years of dividend raises, Coca-Cola more than qualifies as a Dividend King. That's a company where the payouts have increased annually for at least 50 years without interruption. It is also focused on delivering affordable, strong brands that generate high margins.
Altogether, Coca-Cola is one of the best blue chip dividend stocks to build toward $1,000 in annual passive income.
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John Ballard 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.