1 Magnificent Dividend Stock Down 7% to Buy Now for a Lifetime of Passive Income

• Coca-Cola is a Dividend King, with more than six a long time of annual dividend will increase behind it.

• The company sells what quantities to an reasonably priced luxurious with a very loyal buyer base.

• 10 shares we like higher than Coca-Cola ›

Wall Street is half voting machine and half weighing balance. Near-term costs can be a bit risky, but over the long time period, traders have a tendency to get fairly close to the proper valuation for shares.

Coca-Cola‘s (NYSE: KO) stock price is beginning to come out of a transient funk, suggesting that there’s still time to add this dependable high-yield stock to your passive income portfolio if you act rapidly.

Coca-Cola’s stock price is at present down around 7% from its 52-week high, but it was down around 10% not too long in the past. A ten% drop is what’s identified as a correction on Wall Street. The time period is usually related with the broader market, but it applies to particular person shares, as effectively. The present drawdown in Coca-Cola’s shares has made the price of the stock more engaging.

At the second, Coca-Cola’s price-to-sales and price-to-earnings ratios are below their five-year averages. The low cost here is not huge, but the stock does not go on the sale rack very usually. So, any low cost is one price trying at.

On the dividend entrance, Coca-Cola has been a passive income dream come true. It has elevated its dividend for more than six a long time, putting it in the extremely elite group of corporations identified as Dividend Kings. If you are trying for dependable dividends, there aren’t many corporations that can compete with Coca-Cola’s observe report.

The dividend yield, meanwhile, is only about center of the street for Coca-Cola at roughly 3%. But 3% is effectively above the 1.2% of the S&P 500 index (SNPINDEX: ^GSPC) and increased than the 2.7% average for shopper staples shares.

All in, you get a dependable dividend stock that has an engaging yield and what seems like a truthful to barely low-cost price. There’s a lot to like here for dividend traders.

Coca-Cola is one of the largest shopper staples corporations on the planet. It has the model portfolio, distribution power, advertising and marketing ability, and innovation chops to compete with any peer. In truth, Coca-Cola is the most important non-alcoholic beverage company in the world, with a model that is acknowledged and cherished in more than 100 international locations.

What’s so particular about the business, however, is that Coca-Cola is mainly just promoting flavored water. That’s an costly method to fulfill a fundamental need, but the value is pretty modest in the grand scheme of issues. So it is an reasonably priced luxurious that most shoppers won’t willingly give up. There’s a big quantity of model loyalty in the beverage sector. So, even during intervals of financial weak spot, like recessions, Coca-Cola’s business tends to be pretty resilient.

The current pullback, meanwhile, is at least partly associated to shifting shopper tastes. More and more people are trying for more healthy food and beverage choices. Investors are fearful that sugary sodas aren’t in line with present trends. Coca-Cola has a long historical past of adjusting along with shoppers and, with a market cap of $290 billion, it has the scale to purchase total corporations if it wants to in order to replace its model portfolio. So, unless you believe that this time is totally different, it seems applicable to give management the benefit of the doubt when it comes to adjusting to shopper style preferences.

In truth, it is incomes the benefit of the doubt as each quarter goes by. Despite working in a tough market proper now, Coca-Cola was still in a position to increase case volumes by 1% in the third quarter of 2025. It leveraged that modest increase into 6% natural income growth and 6% adjusted earnings-per-share growth. It’s not like Coca-Cola is hitting the ball out of the park, but it is still posting robust outcomes even during a tough period.

Coca-Cola’s stock is not filth low-cost from a valuation level of view. But it does not go on the sale rack very usually, given how robust a business it has. A good to barely low-cost price is normally a good entry level for long-term traders. That’s notably true if you are trying to construct a dependable passive income stream. Don’t let the present price correction here slip away from you — do a deep dive into Coca-Cola proper now.

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Reuben Gregg Brewer has no place in any of the shares talked about. The Motley Fool has no place in any of the shares talked about. The Motley Fool has a disclosure coverage.

1 Magnificent Dividend Stock Down 7% to Buy Now for a Lifetime of Passive Income was initially printed by The Motley Fool