2 Dividend Stocks to Double Right Now

Starbucks (NASDAQ: SBUX) And Coca-Cola (NYSE: KO) have a lot in common. In addition to serving up caffeinated beverages to a thirsty world, both companies also have shareholder-friendly dividend policies — and their shares have underperformed the stock market over the past year. Coca-Cola’s total return over that period is just 8.7%, while Starbucks has seen its value fall 20.5%. S&P 500 gained 28.6%.

In other words, these household names offer high dividend yields and the promise of continued dividend increases in the years to come. And in my view, the rumors of the demise of Starbucks and Coca-Cola are greatly exaggerated. High-quality stocks are currently selling at bargain prices.

If you are looking for a great dividend stock to buy todayYou should consider doubling your Coca-Cola and Starbucks consumption. Here’s why.

KO Dividend Chart

A common history of increasing dividends

As you can see in the chart above, Starbucks and Coca-Cola have a history of increasing their dividend payments every year.

Coca-Cola’s dividend growth history is much longer, spanning several decades. This long-term growth provides investors with a sense of security and predictability, which is particularly appealing to those seeking steady income. If Coca-Cola has raised its dividend through good times and bad for 63 years (which it has), the company seems likely to continue to increase its quarterly dividend checks regardless of the downturns and business challenges ahead.

By contrast, Starbucks’ green line is shorter, but it also comes with a much steeper growth trajectory. After it began paying dividends in the spring of 2010, Starbucks quickly increased its payout. This dynamic policy trend reflects the company’s dynamic growth and strong financial health.

Coca-Cola offers a more consistent and historically reliable dividend, which might be better for conservative investors who are looking for long-term stability above all else. On the other hand, Starbucks’ higher dividend growth rate might appeal to investors who are willing to take a bit more risk for the potential for higher returns.

KO Free Cash Flow Chart

Robust free cash flow supports payments

The chart above shows you the robust free cash flow behind these eye-watering dividend payments. It’s great to see dividends funded by strong cash flow, and these great companies deliver that quality brilliantly. Coca-Cola spent 79% of its free cash flow on dividend payments over the past year, and Starbucks’ cash payout ratio stopped at 63%.

Today, Starbucks and Coca-Cola face significant business challenges. Changing consumer preferences are a constant concern, as is the constant arrival of new competitors.

However, these companies are addressing their challenges in very different ways. Starbucks is doubling down on efforts to strengthen its premium image, expanding its high-end Reserve stores and personalized digital experiencesAs part of its digital strategy, the company uses its loyalty program to increase customer loyalty…

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