Stock Analysis & Ideas

Do You Seek Reliable Passive Income? Trust this Low Beta Stock

Story Highlights

Earn reliable passive income with dividend-paying stocks. In this article, we’ll discuss one consumer stock with a low beta and a stellar dividend payment and growth history.

Investors eyeing reliable passive income could consider investing in top-quality dividend stocks. While several companies have been paying and increasing their dividends, Coca-Cola (NYSE:KO) is a Dividend King, implying it has consistently raised its dividend for over 50 years. Also, KO is a low-beta stock (it has a beta of 0.57), implying it is relatively less volatile than the S&P 500 Index (SPX). 

For instance, the graph below shows that KO stock has outperformed the SPDR S&P 500 ETF Trust (SPY) this year. SPY aims to provide returns similar to the S&P 500 index. 

Coca-Cola’s Stellar Dividend Payment and Growth

As stated above, Coca-Cola is Dividend King, implying that it has consistently enhanced its shareholders’ value through higher dividend payments. To be precise, Coca-Cola has increased its dividends for 60 years in a row. Moreover, it offers a dividend yield of 2.8%

The beverage giant paid $7.3 billion in dividends in 2021. Furthermore, it returned about $69.2 billion in dividends between 2010 and 2021. As for 2022, KO has paid $3.9 billion in dividends for the nine months that ended on September 30. 

Coca-Cola’s resilient business, strong organic revenue, consistent EPS growth, and solid balance sheet support its higher payouts. Thanks to the strength in its business despite macro headwinds. Its CFO, John Murphy, is upbeat and expects to create “value” for its shareholders through “strong top-line growth, cash flow generation, and dividend growth.” 

Is KO Buy or Sell?

On TipRanks, KO stock has received 12 Buy and two Hold recommendations, translating into a Strong Buy consensus rating. Moreover, analysts’ average price target of $66.29 implies 6.3% upside potential to current levels. Also, Coca-Cola stock sports a Smart Score of nine on TipRanks, indicating a positive outlook.

Bottom Line  

Coca-Cola’s resilient business, low beta, high Smart Score, and solid dividend payment and growth history make it an attractive investment to earn reliable passive income. 

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