Coca-Cola Stock Is Interesting, but Here's What I'd Buy Instead

Core Viewpoint - Investors are increasingly favoring established companies like Coca-Cola for passive income amid market uncertainty, but Campbell's is presented as a more attractive investment option due to its valuation and dividend yield [1][2]. Coca-Cola - Coca-Cola has a strong history of increasing dividends for 64 consecutive years, currently offering a yield of 2.6% [1]. - The stock price of Coca-Cola increased by 12.3% in 2025 and is up 14.2% year-to-date, significantly outperforming the S&P 500's return of 0.9% [2]. - Coca-Cola's market cap stands at $347 billion, with a gross margin of 61.75% and a dividend yield of 2.53% [8][9]. - The company remains heavily reliant on its soft drink products, which accounted for 69% of its worldwide case volume in 2025, with its trademark cola making up 42% of U.S. unit case volume [6][7]. Campbell's - Campbell's is diversified beyond soup, owning various meal and snack brands, and is focusing on health-conscious products [4]. - The current market cap for Campbell's is $8.1 billion, with a gross margin of 29.84% and a dividend yield of 5.72% [5][6]. - Campbell's has a forward price-to-earnings ratio of 11.1, significantly lower than Coca-Cola's 24.7, indicating it is undervalued [9]. - The company has maintained or raised its dividend every year since 2002, currently yielding 5.8%, which is substantially higher than Coca-Cola's yield [13][14]. - Despite challenges in passing costs to consumers, Campbell's generates sufficient free cash flow to cover its dividend, with a payout ratio similar to Coca-Cola's [11].