The Coca-Cola Company (NYSE:KO) will increase its dividend from last year's comparable payment on the 1st of April to $0.485. The payment will take the dividend yield to 3.3%, which is in line with the average for the industry.
Unless the payments are sustainable, the dividend yield doesn't mean too much. Prior to this announcement, Coca-Cola was paying out 74% of earnings and more than 75% of free cash flows. This is usually an indication that the focus of the company is returning cash to shareholders rather than reinvesting it for growth.
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The next year is set to see EPS grow by 27.6%. Assuming the dividend continues along recent trends, we think the payout ratio could be 62% by next year, which is in a pretty sustainable range.
The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $1.12, compared to the most recent full-year payment of $1.94. This works out to be a compound annual growth rate (CAGR) of approximately 5.6% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Coca-Cola has grown earnings per share at 10% per year over the past five years. The payout ratio is very much on the higher end, which could mean that the growth rate will slow down in the future, and that could flow through to the dividend as well.
In Summary
In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The payments look okay by most measures, the lack of cash flow could definitely cause problems for them in the future. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 2 warning signs for Coca-Cola that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Coca-Cola Company (NYSE:KO) has announced annual dividend increases over the past 62 years without a break, an achievement which has made it one of the safest dividend stocks in the market.
Coca-Cola isn't just a top dividend stock because of its high yield; the dividend is reliable and growing. co*ke paid $8 billion in dividends in 2023, with a payout ratio of 74%. That's in management's ideal zone; Coca-Cola's chief draw for investors is its rock-solid passive income stream.
KO 's annual dividend is $1.94 per share. This is the total amount of dividends paid out to shareholders in a year. The Coca-Cola Company's ( KO ) ex-dividend date is June 14, 2024 , which means that buyers purchasing shares on or after that date will not be eligible to receive the next dividend payment.
The Coca-Cola Company (NYSE:KO) will increase its dividend from last year's comparable payment on the 1st of April to $0.485. The payment will take the dividend yield to 3.3%, which is in line with the average for the industry.
Overall, it has been growing its dividends consistently for the past 62 years, which places KO on our list of the best dividend stocks for the long term.
The average price target for Coca-Cola is $67.85. This is based on 14 Wall Streets Analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $72.00 ,the lowest forecast is $58.00. The average price target represents 10.07% Increase from the current price of $61.64.
Berkshire currently owns 400 million shares of Coca-Cola. This means that on an annualized basis, Warren Buffett's company generates $736 million in dividend income from the beverage giant. That is a huge passive income stream that likely explains why Buffett isn't exiting the position.
You would have more than doubled your money, with a total investment worth of $2,029.55. That's a 103% return, or a 7.23% annual rate of return. Interestingly, despite co*ke's dominance on the world stage, investing in co*ke's main rival, Pepsi, 10 years ago would have given you more pop for your buck.
Coca-Cola (NYSE: KO) is often considered a safe blue chip stock. It owns the world's top soda brand, it generates plenty of cash, and it pays consistent dividends. But over the past 12 months, its stock declined 3% as the S&P 500 rallied 23%.
Consult S&P Global for official information. We review all 68 Dividend Aristocrats each year. The 2024 Dividend Aristocrats In Focus series continues with a review of beverage giant The Coca-Cola Company (KO). Not only is Coca-Cola a Dividend Aristocrat, it is a Dividend King as well.
During the past 5 years, the average Dividends Per Share Growth Rate was 3.30% per year. During the past 10 years, the average Dividends Per Share Growth Rate was 4.70% per year.
Coca-Cola didn't have an upcoming stock split on the docket as of mid-2023. However, the company has completed several stock splits throughout its history.
Chevron's upcoming ex-dividend date is on May 16, 2024. Chevron shareholders who own CVX stock before this date will receive Chevron's next dividend payment of $1.63 per share on Jun 10, 2024.
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