Coca-Cola and real estate income are both companies that tend to react to economic downturns, yet they’ve historically managed to increase dividends consistently. Coca-Cola has seen steady overall growth and impressive performance recently.
Real estate income, as a REIT, has also offered a decent yield of 5.5% following a slump in its stock prices over the past three years.
This might be a good time to reflect on dividend-paying investments for your portfolio. With the Federal Reserve potentially lowering fees soon, companies with long histories of steady dividends could present better returns, especially when bond yields are less attractive.
If you’re thinking about jumping into dividends, even a small investment of $500 in either Coca-Cola or real estate income could yield rewarding long-term benefits. Let’s take a closer look at these two income-generating options.
Investing in Coca-Cola doesn’t require urgency. This company, which has been around for 135 years, boasts a reach that includes over 200 brands available in more than 200 countries. It’s not just the recognizable cola that makes Coca-Cola special; they also offer a variety of beverages, including hydration options, coffee, tea, juices, and dairy products. The brand has a diverse portfolio, with 30 of its products generating over a billion dollars in annual sales.
Presently, there are 2.2 billion Coca-Cola drinks available worldwide. With its longstanding reputation, Coca-Cola remains an attractive investment.
Coca-Cola appeals to dividend investors for several reasons. Its current yield sits at a robust 2.9%, and the dividend has been consistently increasing. Coca-Cola has managed to extend its annual dividend growth streak to an impressive 63 years.
However, there are some concerns about consumer trends for soft drinks. Still, examining the broader context reveals that revenue has generally trended positively over the last few years. Analysts are optimistic about a 5% revenue increase for the latter half of the year.
The bottom line for Coca-Cola has consistently outperformed expectations, even if it’s not particularly flashy. A look at the last six financial updates shows sustained positive surprises.
| Period | EPS Estimation | Actual EPS | Surprise |
|---|---|---|---|
| Q1 2024 | $0.70 | $0.72 | 3% |
| Q2 2024 | $0.81 | $0.84 | 4% |
| Q3 2024 | $0.75 | $0.77 | 3% |
| Q4 2024 | $0.52 | $0.55 | 6% |
| Q1 2025 | $0.72 | $0.73 | 2% |
| Q2 2025 | $0.84 | $0.87 | 4% |
Data source: Yahoo! Finance. EPS = Earnings per share (adjusted).
Coca-Cola might not appear cheap at about 22 times its projected profit for the upcoming year, suggesting a relatively low growth expectation. However, for one of the premier brands globally, this may still be a reasonable price. The reliable demand for affordable beverages, even in tougher economic times, suggests resilience. Plus, the anticipated annual dividend increase shouldn’t be overlooked.
Meanwhile, while Coca-Cola has its impressive streak, real estate income boasts 111 consecutive quarters of dividend hikes over three decades. Its current yield of 5.5% is significantly higher than Coca-Cola’s. This REIT also stands out for its monthly payment structure, which can be appealing for some investors.
Real estate income manages a vast portfolio of over 15,000 commercial properties. Even if the economy stumbles, their historical dividend growth indicates that they handle volatility well. The majority of their leases come from retail sectors—like stores and supermarkets—that generally react better to economic hardships.
The annual distribution of $3.228 per share is well-covered by adjusted funds that range around $4.24 to $4.28 per share. Despite a tough year for REITs with slightly declining stock prices, the long history of dividend increases positions real estate income favorably compared to the minimal returns of money market funds.
