Want $1,000 in Dividend Income? Here's How Much You Have to Invest in Coca-Cola Stock
Coca-Cola has a long history of increasing dividends.
Investing in dividend-paying stocks can prove rewarding over time. It’s a good way to receive regular income — assuming the company has the means to continue making payouts, of course.
Coca-Cola (KO -0.42%), with a stable of popular beverages like soda, water, juice, and plant-based drinks, has a long history of not only paying dividends but raising them. Earlier this year, the board of directors raised dividends by 5.4%, marking 62 straight years with an increase. That makes the stock a Dividend King, part of an illustrious group of companies that have increased payouts for at least 50 consecutive years.
How much money would you have to invest if you want to receive $1,000 in annual dividends?
Investment calculation
Coca-Cola currently pays a $0.485 quarterly dividend. That works out to an annual dividend of $1.94 a share. To receive $1,000 in dividends, you’ll have to purchase 516 shares.
How much will those 516 shares cost? At the current $70.75 per share, you’ll have to invest about $36,500. Notably, these calculations take a cautious approach by assuming dividends remain constant.
You shouldn’t have to worry about the company cutting dividends, either. Investors can take comfort in knowing that Coca-Cola’s free cash flow (FCF) easily covers dividends. During the first half of the year, it generated an FCF of $3.3 billion and paid out $2.2 billion in dividends.
Coca-Cola’s stock has a 2.7% dividend yield, more than double the S&P 500‘s 1.3%. With the company’s strong commitment to dividends, high yield compared to the market, and free cash generation that supports payments, dividend-seeking investors should find these shares attractive.