Is Coca-Cola

a Huge Dividend Stock?

  Is Coca-Cola a Huge Dividend Stock? Can Coca-Cola keep the dividend record amidst major challenges? Coca-Cola (NYSE: KO) is a respectable 135-year-old company known for its beverage sales worldwide. In fact, the Coca-Cola, Diet Coke, Fanta, and Sprite brands make up four of the five best-selling soft drink brands in the world. The company has branched out, selling water, plant-based drinks, teas and coffees, among other beverages. While Coca-Cola is undoubtedly a very successful company, is it still a big stock for investors looking for dividends? Strong history For starters, it's worth remembering that Coca-Cola has a long history of increasing dividends. In February, the company announced it would increase the quarterly payment by one penny to $ 0.42 per share. This was the 59th year he managed to increase payments. Companies that have reached half a century of increasing payments are referred to as the Dividend King, and last year there were only 27 companies on this famous list. While this is impressive, there have been many companies that gave unpleasant surprises to their shareholders after collecting dividends for years. Still, this is a good starting point as it shows how important dividend distribution is to the company and increases during long periods of recession such as a pandemic. To determine Coca-Cola's dividend sustainability, it is necessary to look at the fundamentals of the company.

Can Coca-Cola keep the dividend record amidst major challenges?

The future looks good The year 2020 has been a tough year for the company. Sales were negatively affected as public places such as restaurants, bars and stadiums were closed due to the pandemic. Before Covid-19, this segment accounted for about half of sales. In 2020, the company's sales fell by 9 %. Despite a very difficult year, the company was able to distribute $ 7 billion of its $ 8,7 billion of free cash flow as dividends, thanks to prudent management. CFO John Murphy, who was optimistic about the post-vaccination and normalization time, said in the company's fourth-quarter earnings call: "I am confident we will achieve a 2021 gain at or above 2019 levels as our overall strategic direction strengthens." Do you reach greatness? At 3,2 %, Coca-Cola's dividend yield is more than double the S&P 500's 1,5 % return. This is another point in favor of the company. So, do all these factors make up a large dividend? The answer is absolutely yes, as the company has successfully emerged through all these difficult times, and for those looking to buy a stock that pays dividends, Coca-Cola is the perfect choice. Can Coca-Cola keep the dividend record amidst major challenges?  

Source: The Motley Fool

 

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