Looking for reliable dividend income? You'd be hard-pressed to find a better all-around option than The Coca-Cola Company (KO -1.06%). While you can find higher yields than its forward-looking dividend yield of 2.8%, with 63 consecutive years of annual payout growth under its belt, the beverage giant's dividend pedigree is second to none. Some investors use its reliably rising dividend to pay their ever-rising recurring bills.
So, how much Coca-Cola stock would be needed to, say, generate $4,000 worth of dividends per year (which is about how much the average household spends per year on utilities, gas, water, phone, and cable TV, by the way, according to the Bureau of Labor Statistics.)
It's not a company that needs much of an introduction. The organization's flagship product is, of course, its namesake cola. The Coca-Cola Company, however, also owns other beverage brands like Minute Maid juices, Powerade sports drinks, Gold Peak tea, and Dasani water, just to name a few. This diverse lineup means it's got something to sell to nearly all consumers, catering to their continually changing preferences. That's one of the key reasons it's been able to afford over six decades of reliable yearly payout growth.
To this end, with its most recent dividend increase to $0.51 per share, you would need 1,961 shares of Coca-Cola to pocket $1,000 in quarterly dividend income from this well-known consumer goods name, or $4,000 per year. That's roughly $140,000 worth of the beverage stock at its present price.
That's no small amount of money for average investors. But, it may be more attainable than you think. The key is growing the position by reinvesting Coca-Cola's dividend payments in more shares of the company until you need these dividends in cash. A modest $12,500 investment in this stock 30 years ago would be worth $141,000 today, for perspective, had you reinvested its dividends along the way.
Although past performance is no guarantee of future results, this performance does point to what's possible.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.