The Motley Fool·2025-12-16 13:15Core Viewpoint - Investors are encouraged to consider Coca-Cola and Campbell's as dividend-paying value stocks, each offering unique advantages for passive income generation [1][2]. Group 1: Coca-Cola (KO) - Coca-Cola is recognized for its consistent performance and reliable dividend, yielding 2.9% [2][8]. - The company anticipates a 3% increase in non-GAAP earnings per share (EPS) and 5% to 6% organic revenue growth for the current fiscal year, with an 8% forecast for non-GAAP currency-neutral EPS growth [7][8]. - Coca-Cola's market capitalization stands at $305 billion, with a current stock price of $70.97 and a reasonable valuation at 23.7 times its projected $2.97 in non-GAAP fiscal 2025 EPS [9][10]. Group 2: Campbell's (CPB) - Campbell's stock is currently undervalued, with a dividend yield of 5.4%, despite facing challenges from inflation and consumer resistance to price increases [11][14]. - The company is focusing on health and wellness trends, with successful brands like Rao's Italian sauces demonstrating growth potential even at premium prices [12][14]. - Campbell's market capitalization is $8.4 billion, with a current stock price of $28.27, trading at just 11.5 times the midpoint of its full-year fiscal 2026 EPS guidance [13][15]. Group 3: Investment Strategy - A balanced investment strategy involving a 50/50 split between Coca-Cola and Campbell's could yield a combined dividend rate of 4.2%, appealing for passive income [16][17]. - Coca-Cola is characterized by its strong supply chain and marketing, while Campbell's offers a higher yield and potential for recovery due to its diverse brand portfolio [16][18].