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Here's How Many Shares of Coca-Cola Stock You'd Need for $1,000 In Yearly Dividends | The Motley Fool

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  Published in Stocks and Investing on Saturday, September 13th 2025 at 4:25 GMT by The Motley Fool
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How Many Shares of Coca‑Cola Stock Would You Need to Earn $1,000 a Month?

When people think about “income‑generating” investments, the word “dividend” usually comes to mind. And few dividend stocks have earned the same reputation as Coca‑Cola (KO). The beverage giant has paid a dividend for more than a century, and its yield is consistently among the best in the S&P 500. If you’re eyeing a steady stream of passive cash, you may wonder exactly how many shares you would need to own to pull in a cool $1,000 each month.

Below is a straight‑forward breakdown, based on the most recent figures available as of mid‑2025. It uses the same methodology the article on The Motley Fool employs, but adds a few extra angles—such as the impact of share price changes, the tax implications, and why you might consider a dividend‑reinvestment plan (DRIP) before you start buying.

1. Start with the Basics: Dividend Yield and Share Price

Coca‑Cola’s annual dividend is $1.68 per share (four quarters of $0.42 each). With a share price hovering around $58.00 (the price used in the original article), the dividend yield comes out to roughly 2.9%.

Formula:
Yield = Annual Dividend ÷ Share Price
$1.68 ÷ $58.00 ≈ 0.02897 → 2.9%

A 2.9% yield means that for every $1,000 you invest, you’ll get about $29 back in dividends each year.

2. Translate the Target Income into Share Requirements

You want $1,000 a month, which equates to $12,000 a year.

Shares Needed = Target Annual Income ÷ Dividend per Share

$12,000 ÷ $1.68 ≈ 7,143 shares

If you round down, you’ll receive $11,980 a year, which is a mere $20 shy of the goal. Rounding up to 7,144 shares gives a perfect $12,001. The key takeaway: you’ll need roughly seven thousand shares.

3. How Much Does That Cost?

At $58.00 per share, 7,143 shares amount to:

$58.00 × 7,143 ≈ $413,674

That’s the minimum you’d need to spend in the stock market to start pulling in $1,000 per month from Coca‑Cola dividends alone. If you want a cushion against price dips, you might buy a few extra shares or pair the investment with other income‑generating assets.

4. The DRIP Advantage

If you are buying thousands of shares, you’ll inevitably accumulate a sizable amount of cash in dividend payouts. Rather than pocketing those dollars, you can enroll in Coca‑Cola’s Dividend Reinvestment Plan (DRIP). DRIPs automatically purchase additional shares—often at a discount (typically 1–2%)—using the dividend proceeds.

Reinvesting the dividends means:

1. Compounding: Your share count grows over time, eventually boosting the future dividend payments.
2. Dollar‑cost averaging: The plan buys shares whenever the price dips, smoothing out market volatility.
3. No transaction fees: Most DRIPs waive the brokerage commissions that would normally apply.

With a DRIP, the effective number of shares you own can swell beyond the original 7,143, accelerating the growth of your passive income.

5. What About Taxes?

Dividend income is taxable, but the tax treatment depends on whether the dividend is classified as qualified or non‑qualified.

• Qualified dividends (most Coca‑Cola payouts) are taxed at the favorable long‑term capital gains rate (0%, 15%, or 20% depending on your bracket).
• Non‑qualified dividends are taxed at your ordinary income rate.

In 2025, a qualified dividend is taxed at 15% for most taxpayers in the 15% bracket. That means you’d keep roughly 85% of the $1,000 per month ($850 after tax). To net $1,000 after taxes, you’d need to earn about $1,176 in dividends before tax, which would require roughly 7,400 shares—an extra $17,000 in capital.

6. Risk and Reward: Why Coca‑Cola Is Still a Solid Choice

• Stability: Coca‑Cola has a long history of dividend consistency—even through recessions. The board rarely cuts the payout; instead, it typically increases it.
• Diversified Product Portfolio: From sodas to bottled water and tea, Coca‑Cola’s revenue streams span a wide range of consumer goods.
• Cash Flow: Strong cash reserves allow the company to pay dividends while still investing in growth.

However, no stock is risk‑free:

• Price Volatility: The $58 share price can swing in response to broader market movements or sector‑specific sentiment. A 10% drop would push the yield up to 3.2% but also lower the absolute dividend income until you own more shares.
• Dividend Adjustments: While unlikely, the board could decide to reduce or suspend the dividend if cash flow pressures mount or if the company needs to divert funds into capital expenditures.
• Tax Law Changes: Future adjustments to the tax code could alter the attractiveness of qualified dividends.

Despite these caveats, many investors see Coca‑Cola as a “bullet‑proof” component of a retirement portfolio.

7. Practical Steps to Get Started

1. Open a brokerage account that supports dividend reinvestment and offers zero commissions on equity trades. Many platforms (like Fidelity, Charles Schwab, or Robinhood) provide this feature.
2. Calculate your target investment: Determine how much capital you can allocate to dividend income. If you can afford $400,000, you’re in the ballpark for $1,000 a month from KO.
3. Buy in bulk: Buying all at once may expose you to a temporary price spike. Consider a dollar‑cost averaging approach—splitting the purchase over several weeks or months.
4. Enroll in the DRIP: Once the shares are in your account, sign up for automatic reinvestment.
5. Monitor: Keep an eye on quarterly dividend announcements and any changes in payout policy. Also watch the share price for major fluctuations that could affect your yield.

8. The Bottom Line

Generating a steady $1,000 per month from Coca‑Cola’s dividends requires a significant capital commitment—about $410,000 to $420,000 in the stock. With a share price of $58, you’ll need roughly 7,150 shares. The dividend yield of around 3% ensures a reliable payout, but remember that taxes will reduce your net income. Leveraging a DRIP can accelerate growth and smooth out market volatility.

For retirees looking for a low‑maintenance, high‑dividend source of cash, Coca‑Cola is a strong candidate. But as with any concentrated position, diversification remains essential. Pairing Coca‑Cola with other dividend‑heavy sectors—such as utilities, consumer staples, or real‑estate investment trusts—can help spread risk while still targeting that monthly $1,000 milestone.