Why Coca-Cola is a Solid Long Term Dividend Stock

Coca Cola

Corporations have a couple of choices when it comes to their earnings. One, corporations can reinvest those earnings into their operations, thus enabling them to expand at a faster pace than otherwise possible. Two, corporations can hand out those earnings to their shareholders in the form of dividends, which can consist of either cash or more shares. As such, dividend stocks are stocks with a strong association with dividends. Sometimes, dividend stocks are preferred stocks, meaning that they pay out fixed dividends at fixed intervals. Other times, dividend stocks are “just” common stocks belonging to corporations with a very consistent record of paying out dividends. Whichever the case, dividend stocks are an excellent choice for people who want to receive regular sums of cash while benefiting from the other upsides of stocks, meaning that interested individuals would do well to look into potential options such as Coca-Cola.

How Does Coca-Cola Earn Its Revenues?

The Coca-Cola Company is one of the most famous companies that can be found on the planet. As such, it should come as no surprise to learn that its operations aren’t limited to a single geograhic location but instead extend to encompass more than 200 countries in five regions. With that said, even if interested individuals think that they are familiar with the Coca-Cola Company, it can still be worthwhile to mention something about how it makes its revenues.

Primarily, the Coca-Cola Company is known for its flagship product, which is, of course, Coca-Cola. Initially, Coca-Cola was a non-alcoholic version of a coca wine created in response to the passage of prohibition legislation in Atlanta and the rest of Fulton County. The “Coca” referred to the coca leaf that contained cocaine, while the “Cola” referred to the kola nut, which was then sometimes spelled cola nut, that contained caffeine. Unsurprisingly, that earliest formulation is no longer in use, having been replaced by various formulas about which little is known because they are important trade secrets for the Coca-Cola Company.

In any case, it is important to note that the Coca-Cola Company is focused on producing a concentrate. Said product is sold to various Coca-Cola bottlers that hold exclusive rights to their respective territories, which proceed to use the concentrate in combination with other ingredients such as filtered water to produce both cans and bottles of Coca-Cola for sale. These cans and bottles are then sold to various retailers, who in turn, sell them to various kinds of consumers. Having said this, the Coca-Cola Company isn’t 100 percent hands-off when it comes to its Coca-Cola bottlers, as shown by the fact that it is prepared to help out when said operations seem to be in serious trouble. This makes perfect sense because if a Coca-Cola bottler goes down, that doesn’t just create a huge inconvenience for the Coca-Cola Company’s revenue-earning operations but also damages its very valuable brand because of the strong connections between them.

Besides this, the Coca-Cola Company is involved in various other revenue-earning operations as well. For example, while Coca-Cola might be its most famous product, it is far from being its sole brand. Likewise, some of the Coca-Cola Company’s concentrate is meant for soda fountains rather than Coca-Cola bottlers, meaning that it has direct sales to restaurants as well as various other customers who have such machines on their premises. On top of this, the Coca-Cola Company is involved in a deeper way with a number of Coca-Cola bottlers as well.

Why Should You Consider Coca-Cola For Your Dividend Stock?

There are a number of reasons why people should consider Coca-Cola for their dividend stock. For instance, it should be clear that the Coca-Cola Company has a very solid foundation. As a result, the chances of the Coca-Cola Company suffering something serious enough to threaten its economic well-being in the long run are not very high, meaning that interested individuals can have continuing confidence in its ability to prosper.

However, the single best argument for the Coca-Cola Company as a dividend stock is its record of success in this regard. In short, it has managed to raise its dividends in period after period for more than 50 years by this point in time, meaning that it isn’t just a dividend aristocrat that has managed to do so for 25 years and counting but a dividend king that has managed to do so for 50 years and counting. Of course, past performance isn’t a perfect predictor of what will happen in the future. Theoretically, it is possible that the Coca-Cola Company will run into some kind of sudden, unexpected issue that will make it incapable of repeating this feat in the present time. However, that kind of past performance is the closest thing to an ironclad guarantee that interested individuals can expect when it comes to dividend stocks because that kind of consistency is very unusual to say the least. As such, if people think that being a dividend king isn’t enough to make a dividend stock a reliable choice for them, chances are good that they might want to look somewhere else for some other kind of investment altogether.

Summed up, the Coca-Cola Company is one of the most stable choices that interested individuals can find when it comes to dividend stocks. As a result, it should make a fine choice for anyone who wants to make sure that they will be getting their dividends no matter how the economy as a whole performs. Of course, interested individuals will still want to look further into the Coca-Cola Company on their own to make sure that everything is suitable for their particular investment preferences. This is critical because different people can have different priorities that aren’t covered by general summaries, meaning that some research in the present time can save them a great deal of time and inconvenience in the long run. As always when it comes to any kind of financial matter, interested individuals need to be thorough if they want to be able to ensure the best results for themselves.


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