This is something that often gets overlooked in long-term investing, but it’s really significant. According to S&P Global, regular dividend payments have made up a huge 31% of total stock market profits since 1926. That makes them a crucial part of overall stock market returns.
Dividends give investors a way to look past the daily ups and downs of stock prices, allowing them to concentrate on more fundamental aspects like earnings and future leadership, which are essential for sustaining dividends.
I’ve been wondering, could AI lead to the first millionaire ever? There’s a report discussing a little-known company deemed an “essential monopoly” that supplies necessary technology to both Nvidia and Intel. There’s definitely something interesting happening there.
Now, let’s explore why Coca-Cola (NYSE:KO) and Philip Morris International might be solid investment choices in the long run. They seem to have what it takes to perform well.
Coca-Cola is considered a “blue chip” stock, meaning it’s part of a group of large, well-established companies. It’s a well-known beverage giant that has consistently paid dividends for years. The outlook suggests it could maintain strong performance, supported by good profit margins and the ability to endure varying economic conditions.
Even though beverages are seen as discretionary items that people want but don’t necessarily need, the Coca-Cola brand remains incredibly popular. This popularity often leads customers to keep purchasing even in challenging economic times. Surprisingly, Coca-Cola has significant pricing power. For instance, the price of its 12-pack of Coke increased by a staggering 89% from 2020 to 2025.
Despite the rise in prices (which are influenced by factors like the costs of aluminum and sugar), loyal customers continue to buy products as if there’s no tomorrow. In the third quarter, sales rose by 5% year-over-year, reaching $12.5 billion. The company also boasts a robust operating margin of 32%, showing that it effectively passes on increased costs to consumers. Maintaining those high profit margins is crucial for consistent dividends.
Currently, Coca-Cola’s stock has a dividend yield of 2.71%. While this may seem modest compared to other income-focused investments, it has also seen considerable price growth, with shares appreciating about 58% over the last five years.
Similarly, cigarettes are a product that consumers tend to stick with, even during economic downturns. The addictive nature of nicotine has allowed the tobacco industry to remain profitable, albeit amid ethical concerns and regulatory scrutiny. Philip Morris has made a notable shift towards alternative tobacco products, setting it apart from its industry peers.
Looking ahead, traditional cigarettes may lose their popularity over time. Philip Morris is adapting by focusing on alternatives, which has led to a distinct improvement in its performance compared to other tobacco companies. In the last decade, Philip Morris’ stock has soared by 97%, while companies like Altria and British American Tobacco have seen only small increases of 7% and 11%, respectively.
As of now, products aimed at helping people quit smoking constitute 41% of Philip Morris’ sales, available in around 100 markets globally. The 2022 acquisition of Swedish Match for $16 billion has significantly broadened the company’s reach, especially in the U.S., and has introduced new products like Zyn oral tobacco pouches.
Although Philip Morris is known for considerable share price growth, its dividend yield of 3.3% is particularly appealing—far surpassing the average of 1.14% in the S&P 500. The management has a history of returning cash to investors, but share buybacks are currently paused as the company adjusts to costs from the recent acquisition.
Before jumping into investing in Coca-Cola, consider this: a report from our analysts highlights ten stocks that they believe are better buys right now—interestingly, Coca-Cola isn’t included. These selections could offer impressive returns over the upcoming years.
For some context, if you had invested $1,000 in Netflix in 2004 based on a recommendation, it would now be worth an astonishing $436,126! Similarly, a $1,000 investment in Nvidia back in 2005 would have grown to about $1,053,659!
The average return for our stock advisor is an impressive 885%, compared to the S&P 500’s 192%. Definitely worth exploring into our top ten recommendations. You wouldn’t want to miss out on that!
*Just a note, the Stock Advisor returns are set to update on February 7, 2026.
