Dividend Kings represent some of the most reliable income stocks you can find on the market. Any company that’s maintained a streak of increasing its payouts for 50 years straight has a rock-solid business model, proving its capability to weather company-specific hurdles and the ups and downs of the economy.
If you’re on the hunt for stocks that can consistently pump up their payouts over the long haul, browsing through the list of Dividend Kings is a great starting point. Let’s shine a light on two standout companies from this exclusive club that embody the qualities long-term income investors crave: Coca-Cola (NYSE: KO) and Abbott Laboratories (NYSE: ABT).
Few brands on the planet command the recognition that Coca-Cola does. With a diverse mix of beverage offerings that range from soft drinks and alcoholic beverages to tea and coffee, not to mention sports drinks and juices, their portfolio is impressive.
The company’s global reach is expansive, to the point where it’s a challenge to pinpoint a country where Coca-Cola doesn’t hold a presence. The iconic logo is known to spark excitement among kids just about everywhere. Such widespread brand recognition is a significant competitive edge, leading to steady financial results and consistent dividend increases over the years.
With a 62-year streak as a Dividend King, Coca-Cola shows no signs of slowing down. Granted, the company hasn’t exactly been a growth dynamo lately. In the third quarter, its revenue slipped by 1% year over year, landing at $11.9 billion. Meanwhile, adjusted earnings per share bumped up by 5% from the previous year to $0.77—a performance that didn’t quite spark enthusiasm among investors, causing a dip in stock prices.
Yet, Coca-Cola’s resilience is noteworthy. Even as inflation pressures consumers, the company’s unit volume only edged down by 1% year over year in the third quarter. Essentially, even with price hikes, people are sticking with Coke products at nearly the same rates, despite the wide array of alternatives.
Coca-Cola has also kept up with evolving consumer concerns, such as health, by rolling out low-sugar options for several of its drinks. As a result, it remains a dominant force in its niche and continues to reward shareholders with dividend bumps.
Currently, Coca-Cola offers a forward yield of 3.10%, which stands well above the S&P 500’s average of 1.32%. For investors seeking a secure dividend stock to park in their portfolio, Coca-Cola is a robust option.
Now, turning our gaze to Abbott Laboratories, this medical device powerhouse has built its legacy through innovation, stretching across multiple segments—nutrition, established pharmaceuticals, and diagnostics.
Despite a few setbacks, Abbott has remained financially steadfast. The early days of the pandemic saw demand for its medical devices drop, posing a challenge. Additionally, the company had to tackle broader industry hurdles and even faced legal issues stemming from its nutrition segment.
More recently, its diagnostics unit, which had been critical during the pandemic’s initial stages, has shown variable performance as pandemic demand levels off.
Amidst these challenges, Abbott’s financial health is solid. In the third quarter, sales climbed by 4.9% from the previous year, hitting $10.6 billion. Once excluding the impacts linked to coronavirus diagnostic sales, the organic sales growth stood at an impressive 8.2% year over year. Adjusted EPS saw a 6% year-over-year increase, reaching $1.21.
Abbott’s enduring stability in the healthcare sector—one of the most regulated industries—is an asset. With trusted, patented products, the firm enjoys loyalty from professionals, such as doctors, who prize effectiveness and safety.
/Abbott is making strides especially in diabetes care, led by its revolutionary continuous glucose monitoring system, the FreeStyle Libre.
Despite some yield figures such as a forward yield of 1.88% not standing out dramatically, it’s still above the S&P 500’s average, and what you’re getting with Abbott is a reliable business foundation. For this reason, its 52-year streak of annual dividend increases is expected to continue, marking Abbott as a steady dividend growth stock to keep.
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Contributor Prosper Junior Bakiny holds no stocks mentioned. The Motley Fool owns and suggests shares of Abbott Laboratories. They have a proper disclosure policy available.
This article initially appeared in The Motley Fool under the title “2 Dividend Kings to Buy for a Lifetime of Passive Income.”
