Want Income for Life? Coca-Cola Has Raised Its Dividend for 64 Straight Years and Yields 2.5%. Here's Whether It Belongs in Your Portfolio.
2026-10-05 19:05
•Leo Sun •The Motley Fool
•••• ••• Axe Cap view
Dividend Kings and Valuation: A South African Lens on Coca-Cola
Coca-Cola’s long dividend streak is impressive but pricey; South African investors should tread carefully amid more attractive income options.
Coca-Cola’s 64-year streak of raising dividends is the stuff of legend, but paying 26 times earnings for a 2.5% yield feels out of step when US Treasury bonds yield twice that. The company’s strong cash flow and brand power can’t be ignored, yet investors chasing steady income should be wary. Here in South Africa, this dynamic matters through how it influences USD/ZAR, as foreign yield seekers eye US assets. A strong US Treasury yield can keep the rand under pressure, stalling local companies reliant on imported inputs or foreign borrowing. For local income investors, companies like Standard Bank or Sanlam may offer better yields alongside currency sensitivity. Buying Coca-Cola now is a waiting game for a pullback. The risk? If US yields drop sharply, Coca-Cola’s premium valuation could hold, and the currency angle might shift unexpectedly. this is just our opinion and not financial advice
Wait to buy Coca-Cola at lower valuations; focus locally on financials like Standard Bank or Sanlam for income and hedge with rand-sensitive assets. Watch USD/ZAR closely as US yields change.
- USD/ZAR
- Standard Bank
- Sanlam
- US Treasury yields dropping unexpectedly
- Rand strengthening sharply against the dollar
6/10
Coca-Cola is a Dividend King with 64 consecutive years of dividend increases and a 2.5% yield, but the article argues the stock looks expensive at 26x earnings and underperforms the S&P 500 over 10 and 20-year periods. With Treasury yields at 5.3%, investors may find better returns elsewhere, and the author recommends waiting for a pullback before adding shares.
Our take is based on reporting first published by The Motley Fool.