If you’re looking for stocks that pay steady dividends, you won’t be able to avoid looking at the Coca-Cola Company (NYSE: KO). The company announced in mid-2018 that it had raised its dividend again, making it 56 consecutive years that it has done so. Not surprisingly, that startling fact places it squarely in the list of so-called dividend aristocrats.
Coca-Cola held its IPO (initial public offering) in 1919 with the help of an underwriter, the Trust Company of Georgia, which is now known as SunTrust Banks. As of Nov. 18, 2018, KO had a market capitalization of more than $213 billion and was selling 500 brands of beverages in 200 countries. In expanding, it has stuck strictly to beverage buys, scooping up Costa Coffee, Minute Maid and Honest Tea, among other brands.
It is no surprise the world’s largest beverage company offers hefty dividends and is part of that exclusive group of stocks known as dividend aristocrats. To be considered a dividend aristocrat, a company must have a managed dividend policy that has increased its dividend payout for at least 25 consecutive years. The company first raised its dividend in 1963 and has continued to do so ever since.
The quarterly dividend announced by Coca-Cola in late April 2018 was 39 cents a share. That represents a yield of about 3.55%, roughly double the average dividend paid by consumer goods stocks.
On Nov. 16, 2018, KO ended the day at $50.30, up 26 cents on the day. It started 2018 at $45.44. For the three-year period, its stock price was up a respectable if unspectacular 17%.
Coca-Cola has a $213.5 billion market cap as of Nov. 16, 2018.
PepsiCo, Inc. Dividend Policy Analysis
One of The Coca-Cola Company’s main competitors, PepsiCo, Inc. (NASDAQ:PEP) is also included in the coveted dividend aristocrats group.
It may get a little less credit than Coca-Cola in popular lore, but Pepsi has an equally colorful history. Invented in 1893 by a North Carolina druggist, it was originally called Brad’s Drink. Its current name was adopted in 1898 and is a reference to the word dyspepsia, a common condition it was claimed Pepsi could cure.
If it hasn’t out-sold Coke in the soft drinks category, Pepsi has competed strongly in its breadth of products, acquiring brands including Frito-Lay, Gatorade, Quaker and Tropicana over the years.
In mid-July 2018, PEP declared a quarterly dividend of 0.9275 cents per share, an increase of a bit over 15% from the previous year. That’s a yield of about 3.7%. Pepsi has paid dividends in every consecutive quarter since 1965.
On Nov. 16, 2018, PEP closed at $118.35, a 1.33% increase for the day. It has changed little in 2018, having started the year at $117.24. It’s up about 17 percent for the three-year period.
PepsiCo had a market cap of $167 billion as of Nov. 16, 2018.