Need income? Dividend stocks are arguably the best choice for most investors. Different bondMost companies’ dividend payments increase over time. Dividend stocks also offer some opportunities for capital growth, even if their starting dividend yields aren’t always as high as you typically see from fixed income instruments.
With this as a background, how much stock would you need to hold, for example, reputable dividend payers? coca cola (To 1.28%)To produce $12,000 in annual dividend income? Here’s the math.
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Crunching the numbers
It doesn’t necessarily have to be the highest-yielding dividend stock to consider adding to your portfolio. Although its forward-looking yield of 2.5% is certainly respectable, it is also average.
Coca-Cola shines as an income investment in a few other ways.
One of those ways is reliable dividend growth. The Coca-Cola Company has not only paid quarterly dividends for decades, but also increased its per share payout in each of the last 64 years. And considering the nature of its products (consumer staples Which people buy again and again) and the powerful brand names that make up its product portfolio, there is no end in sight to this trend.
Another strong argument in favor of holding a stake in Coca-Cola as an income investment is the speed at which its dividend payments have grown. The current quarterly per share payout of $0.53 is 50% more than the $0.35 per share just 10 years ago. This is an inflation-beating annual growth of approximately 4.2%.
However, to answer the question, 5,660 shares of KO would be required to generate $12,000 in annual dividend income at today’s per-share payout rate. At today’s prices, this stock is worth approximately $472,585.
plan ahead
This isn’t exactly a minor change, especially if you’re not in a position yet. You can certainly step into tickers with very high initial yields.
And this highlights an important reality about dividend stock en general. That is, they are not all created equal. Some offer above average yields, but have less potential for price appreciation. Consider a Wireless Service Provider VerizonWhich serves a sustainable but well-saturated market, offering strong, growing dividends but not much real capital growth.
Coca-Cola is at the other end of this spectrum. Its dividend profile is OK, but the stock is up an impressive 83% over the last 10 years. Someone with $472,585 worth of KO shares, who is currently receiving $12,000 in annual dividend income, would have paid just under $260,000 for this stake 10 years ago. The effective yield on their initial investment is now around 4.6%, and the price increase would account for slightly more than half of their total net return.
today’s change
(-1.28%) $-1.08
current price
$83.17
key data points
market cap
day limit
$83.12 -$84.61
52wk range
$65.35 -$85.68
volume
780.3K
average volume
16.8M
gross margin
61.82%
dividend yield
2.47%
The point is, sometimes you need to establish dividend holdings. before you really need The dividend it is going to give. Other times, you don’t.
Either way, Coca-Cola is an undeniably solid dividend stock, even if its current yield isn’t exactly thrilling.