Investors don’t typically expect mature, low-growth, and boring companies to outperform the S&P 500 index. Coca-Cola (NYSE: KO) has something to say about that assumption.
The leading beverage brand’s share price is up 26% in 2026 (as of July 29), well ahead of the benchmark’s 9% gain.
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That capital appreciation might hide the main attraction. Let’s take a closer look at this dividend stock that keeps raising its payout no matter what the market is doing.
Image source: The Motley Fool.
Hiking dividends since the 1960s
The S&P 500 index could be in a raging bull market. Or it could be in a troubling bear market. The economy could be booming. Or it could be in a recessionary period.
Whatever the situation, it doesn’t impact Coca-Cola’s shareholder returns policy. After implementing a hike in February, the business has now raised its dividend payout in 64 straight years. This makes it a Dividend King.
The current yield of 2.4% is certainly sizable. It compares favorably to the 1.08% yield of the S&P 500 index.
Because Coca-Cola is so profitable in both robust and adverse economic times, it has the financial resources to maintain its commitment to investors. It reported free cash flow of $6.9 billion over the last six months.
Momentum continues in a difficult environment
Investors shouldn’t be worried about the sustainability of Coca-Cola’s dividend hikes. The company’s performance in the most recent fiscal quarter (Q2 2026, ended July 3) will give the market the confidence it needs. The momentum is showing up at a time when there are macroeconomic concerns.
Coca-Cola posted net revenue of $13.4 billion, with adjusted earnings per share (EPS) of $0.97. Both of these headline…
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