Key Points

Coca-Cola holds Dividend King status.
Its yield sits below the norm because the shares have performed strongly.

Coca-Cola (NYSE: KO) represents the quintessential dividend investment. It generally delivers an attractive yield, offers exceptional dependability, and has increased its payout each year for the past 64 years. This piece examines the yearly cash flow an investor would receive from placing $10,000 into Coca-Cola shares.

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Coca-Cola qualifies as a Dividend King because it has raised its dividend annually for more than five decades in a row. This rare distinction signals strong reliability, a key trait for investors who rely on steady passive income such as retirees.

The stock currently yields 2.5 percent, which is modest for Coca-Cola; the historical average sits near 3 percent. Investors have favored the shares lately, driving the price up nearly 20 percent year to date, roughly twice the gain posted by the S&P 500.

At the present price, a $10,000 purchase secures 121 shares, and the firm distributes $0.53 per share each quarter following its most recent increase. This totals $256 in annual income. While the figure may appear modest, several factors deserve attention. Because the stock has risen sharply, a $10,000 commitment made at the start of the year is now valued at $11,820.

Moreover, the dividend is expected to rise again next February. Consequently, the $256 received this year will grow in subsequent years.

Although this amount alone would not sustain a retiree, it can serve as a solid component within a diversified portfolio aimed at generating passive income.

Should you buy stock in Coca-Cola right now?

Before purchasing Coca-Cola shares, consider the following:

The Motley Fool Stock Advisor analyst team recently named the 10 best stocks for investors to buy now, and Coca-Cola did not appear on that list. The 10 selected stocks may deliver substantial gains over the coming years.

For context, when Netflix joined the list on December 17, 2004, a $1,000 investment at the time would now be worth $395,679. Similarly, when Nvidia was added on April 15, 2005, the same $1,000 stake would now equal $1,294,805.

It is also worth noting that Stock Advisor has delivered a total average return of 929 percent, far outpacing the 211 percent return of the S&P 500. Investors can access the latest top-10 list through Stock Advisor and join a community created by individual investors for individual investors.

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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.