Kraft Heinz Yields 6.6% and Coca-Cola Yields 2.3%. Here's Why Only 1 of These Dividend Stocks Is a Buy This November.

Some yields make an investor's eyebrows go up before the brain catches up. Kraft Heinz (NYSE: KHC) at 6.6% is one of them. Coca-Cola's (NYSE: KO) 2.3% yield barely registers beside it.

That's what makes this pairing fun, because the quiet number is the one I'd actually want to own.

Image source: Getty Images.

The cheese in the mousetrap

A yield that large is the wedge of cheese in the mousetrap: attractive precisely because something went wrong with the price.

Kraft Heinz shares sit at $24.24 on Nov. 10, down 35.3% over five years and 70.2% over ten. The $1.60 annual dividend didn't get fatter in the last five years. The stock fell, driving the yield higher without any help from payout boosts.

The latest quarter didn't help. Net sales fell 2% to $6.1 billion, adjusted operating income dropped 15.2%, and adjusted EPS slid from $0.61 to $0.53. Philadelphia cream cheese is losing sales volume as shoppers drift toward cottage cheese and other protein-forward options, and the company's own pricing moves have backfired in the category. Addressing cost inflation on the Q3 earnings call, CEO Steven Cahillane called it "disappointing, but it's real," and management expects it to run slightly above 5% in 2027. That forecast looks like a warning shot on Kraft Heinz's margins.

There are bright spots, to be fair. Emerging markets grew 15.6% organically, and a ramen version of Kraft Dinner in Canada sold three months of inventory in one week. That's a real winner. But the broader North American market, which is the largest part of Kraft Heinz's business, saw organic sales fall by 3.2%. Solid international revenue growth didn't help much, accounting for only $6.4 billion of last year's $24.9 billion total. Good news from the smallest part of the company can't carry the bigger chunk.

The dividend isn't in imminent danger. Free cash flow was $2.4 billion in the first nine months of 2026, about 120% of adjusted net income, against $1.4 billion of dividend payouts. Third-quarter free cash flow of $702 million covered the $474 million dividend about 1.5 times. The worry is direction.

Adjusted EPS guidance ranged from $2.07 to $2.13, so the $1.60 eats about 76% of the midpoint. Adjusted operating income is headed for a roughly 17% drop. A flat payout against shrinking profit is how a cushion thins out, and one more year of inflation outrunning the company's price increases could scuttle this turnaround.

Coke's quieter machinery

Coca-Cola, meanwhile, posted 7% organic revenue growth in the third quarter. Pair that with 5% unit case volume growth, and comparable EPS up 11% to $0.91. If the Coca-Cola company is an engine, India is the piston that never misfires: all 10 of Coke's top brands there grew by double-digit percentages, and Sprite alone rose nearly 20%.

"We expanded our Sprite & Spicy platform into the QSR channel in India with meal combo activations, social media content, and influencer collaborations," CEO Henrique Braun explained on Coke's latest earnings call.

Now the company is applying the lessons learned in India to other potential growth markets, including single-serve drinks in South Africa.

The dividend looks sturdy next to that well-oiled cash machine. The estimated $2.20 annual payout is 67.1% of earnings, and it has grown about 5% a year over both three and five years. Free cash flow was $11.4 billion through nine months, compared with roughly $6.8 billion in dividends, and full-year free cash flow is guided to at least $13 billion. Net debt is 1.3 times EBITDA, below the 2 to 2.5 times target range, which leaves room to breathe.

The catch with Coke

The stock isn't cheap. I see a P/E of 28.6 and a price-to-free-cash-flow ratio of 29.2, and the shares are up 39% year to date, setting all-time highs on a weekly basis recently.

The average analyst target of $99.05 implies just 2.2% upside. Refranchising the African bottler is expected to cost 8 points of 2027 revenue and 2 points of EPS, and an IRS dispute is still waiting on a court decision.

New money buys a 2.3% yield. That doesn't look terribly generous at first glance.

The pick

I'd rather own the 2.3% that grows than the 6.6% that is waiting to be rescued. Kraft Heinz might well pull off its turnaround, and management plans to provide more details on 2027 at an investor meeting this month. But until the numbers say so, Kraft Heinz's big yield is a warning sign, not a gift.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.