Is Coca-Cola Still a Good Dividend Growth Stock to Buy in 2025?

Core Viewpoint - Coca-Cola is a reliable dividend stock with a yield of 2.9%, significantly higher than the S&P 500 average of 1.2%, but faces potential challenges in growth and future dividend increases due to changing market dynamics and economic conditions [1][2]. Dividend Growth - Coca-Cola has a strong history of increasing its dividend, marking a 5% increase for the 63rd consecutive year [4]. - Over the past decade, quarterly payouts have risen by approximately 55%, averaging a compounded annual growth rate of 4.5%, which typically exceeds inflation rates [6]. Profitability and Payout Ratio - The company's payout ratio has averaged around 80% over the past five years, indicating a significant portion of earnings is distributed as dividends, though a lower ratio generally suggests a safer dividend [8]. - Current profitability levels raise questions about the sustainability of future dividend increases, despite past performance [7]. Revenue and Earnings Projections - Coca-Cola anticipates organic revenue growth of 5% to 6% for the year, although comparable earnings per share are projected to increase by no more than 3% due to currency-related challenges [10]. Investment Outlook - Coca-Cola is considered a strong long-term dividend growth stock, adapting well to changing consumer preferences and market conditions, making it a suitable option for investors seeking stability [11]. - The stock has generated year-to-date returns of around 15%, reinforcing its position as a solid buy for dividend-focused portfolios [12].