3 Reliable Dividend Stocks For Uncertain Times: Coca-Cola, AbbVie, And McDonald’s

NYSE: KO | Coca-Cola Company (The)  News, Ratings, and Charts

Prior to the pandemic, only retired people and Trusts and Foundations generally preferred investing in dividend-yielding stocks. But this stereotype no longer holds. With millions of people unemployed due to a pandemic-driven global recession, dividend stocks have gained popularity as investors seek alternative sources of income.

This environment, accompanied by Fed’s near-zero interest rate policy, has propelled many investors who are seeking stability and income to divert capital towards dividend stocks. The Vanguard High Dividend Yield ETF VYM has gained 13.4% over the past six months, reflecting investors’ move toward high dividend-yielding stocks.

The Coca-Cola Company (KO), AbbVie Inc. (ABBV), and McDonald’s Corporation (MCD) have been able to deliver regular dividends over the years, and should be good bets now.

The Coca-Cola Company (KO)

The world’s largest beverage company needs no introduction. Operating worldwide, the company markets more than 500 non-alcoholic beverage brands including Coca-Cola, Diet Coke, Fanta, Thumbs Up, and Sprite.

KO pays $1.64 in dividends annually, yielding 3.1% at its current price. It has a payout ratio of 86.5% of the net income. The company’s dividend payments have grown at a CAGR of 5.6% over the past five years. KO’s Non-GAAP operating margin has increased 230 basis points year-over-year to 30.4% in the third quarter ended September 30, 2020.

Analysts expect KO’s EPS to rise 11.6% to $2.12 for the next year ending December 31, 2021. The company has an impressive earnings surprise history; it beat the Street EPS estimates in three of the trailing four quarters. The consensus revenue estimate of $36.55 billion for the next year indicates a 10.5% rise. KO has gained 14.4% over the past six months.

How does KO stack up for the POWR Ratings?

  • A for Trade Grade.
  • B Buy & Hold Grade.
  • B for Peer Grade.
  • A for Industry Rank.
  • B for Overall POWR Rating.
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