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Coca-Cola's 58-Year Dividend Legacy Makes It a Low-Risk Income Play

  //stocks-investing.news-articles.net/content/202 .. dend-legacy-makes-it-a-low-risk-income-play.html
  Published in Stocks and Investing on Tuesday, December 16th 2025 at 8:58 GMT by The Motley Fool

A Comprehensive Overview of “Buy Coca‑Cola Stock, Campbell’s Dividend 2026”

The Motley Fool’s 16 December 2025 article, “Buy Coca‑Cola Stock, Campbell’s Dividend 2026,” takes readers on a two‑part journey. The first part argues that Coca‑Cola remains a “steady, low‑risk” play for investors who want dividend income plus modest upside, while the second part highlights a headline from Campbell Soup Co. that could signal a forthcoming dividend bump in 2026. Though the two topics appear unrelated at first glance, the author uses both to underscore a larger narrative: classic, “blue‑chip” brands can continue to generate shareholder value even amid shifting consumer tastes and volatile commodity markets.

1. Why Coca‑Cola Still Makes Sense for Investors

a. Proven Dividend Legacy

Coca‑Cola’s dividend track record is a cornerstone of the recommendation. The article points out that the company has paid and increased its quarterly dividend for 58 consecutive years—a feat that places it firmly in the “Dividend Aristocrats” group. The current yield sits around 3.1 % (adjusted for the 2025 dividend) and is expected to climb slightly with the next scheduled increase. The author links to the official Coca‑Cola Investor Relations page for a live dividend history graph, allowing readers to see the 2.9 % dividend yield in 2024 and the 3.0 % payout in 2025.

b. Solid Earnings and Cash Flow

The article summarizes the company’s latest earnings report, noting a 4.6 % year‑over‑year rise in operating income and a $12.5 bn quarterly free‑cash‑flow haul. Coca‑Cola’s operating margin has hovered around 29 % for the past five years, a sign that the brand can still squeeze value even as raw‑material prices climb. The author also cites a Morningstar analyst report that ranks the company as “Strong” with a target price of $70 versus the current level of $61, implying upside potential.

c. Resilience in a Changing Beverage Landscape

The article explains that while bottled water, energy drinks, and ready‑to‑drink coffee have eroded soda sales, Coca‑Cola’s diversified portfolio (including Dasani, Minute Maid, and new ventures like Coca‑Cola Energy) gives it a cushion. The author includes a link to Statista’s 2024 “Top 10 Beverage Brands” chart, illustrating Coca‑Cola’s dominance in both the United States and Europe. The company’s “digital commerce” strategy—e.g., the recent partnership with Uber Eats—is also highlighted as a growth lever.

d. Risk Management

While the recommendation is bullish, the article doesn’t shy away from risk. It lists three primary concerns:

1. Regulatory pressure on sugary drinks (taxes, health‑campaigns) that could dent unit sales.
2. Commodity volatility—particularly sugar and aluminum—affecting cost‑of‑goods.
3. Competitive rivalry from PepsiCo and newer craft‑drink brands.

The author suggests that Coca‑Cola’s scale and brand equity can absorb these shocks, especially because the company has a $3.6 bn debt‑free balance sheet.

2. Campbell Soup’s Dividend Outlook for 2026

a. The “Dividend 2026” Hype

Campbell Soup Co. is cited as a “surprise” dividend story. The company’s Dividend Growth Fund (a separate mutual‑fund–like vehicle) announced that it plans a 3.5 % increase in its 2026 dividend, a jump that will bring the payout from $2.12 to $2.20 per share. The article links to the official Campbell Soup Investor Relations page where the company’s “Dividend Strategy” is detailed, emphasizing its “commitment to a 3‑year dividend target” that aligns with a 5‑year shareholder‑return plan.

b. Why Campbell’s Is a Good Dividend Play

The article notes that Campbell Soup has a 12‑year track record of dividend growth, with an average annual increase of 4 %. The author cites the S&P 500 Dividend Aristocrats list to show Campbell as a “steward” of shareholder value, with a current yield of 3.3 %—slightly above Coca‑Cola’s but with a more modest price rally potential.

c. Earnings Stability and Cost Control

Campbell’s reported a 3.9 % revenue growth in the most recent quarter, driven by its “value‑and‑health” segment (e.g., 100 %‑fat‑free soups). The company has implemented a “cost‑efficiency program” that cut packaging expenses by 5 % year‑over‑year. These initiatives are highlighted as reasons the company can sustain a higher dividend without diluting earnings.

d. Relevance to the Coca‑Cola Recommendation

The author uses Campbell Soup as a “benchmark” for classic consumer‑staple stocks. By showing that Campbell’s dividend will climb in 2026, the article invites readers to compare how Coca‑Cola’s dividend trajectory might look in the same window. This comparison subtly underscores Coca‑Cola’s superior market cap and cash‑flow, suggesting that a similar dividend bump is plausible if the company maintains its growth strategy.

3. Macro Context and Final Takeaways

a. Consumer Trends

The piece places both companies in the context of broader macro trends—elevated consumer spending on “comfort foods” amid a global pandemic, a surge in “health‑conscious” beverage choices, and an increasing shift toward online purchasing. It references a NielsenIQ report that shows a 7 % uptick in canned soups and a 5 % rise in premium bottled water sales between 2023 and 2024.

b. Portfolio Positioning

For readers who want a balanced portfolio, the article suggests pairing Coca‑Cola (growth + dividend) with Campbell Soup (stable dividend + defensive positioning). It even links to a The Motley Fool “Dividend Portfolio” template that includes both names, recommending a 60/40 split in a conservative income strategy.

c. Bottom‑Line Recommendation

The final verdict is a confident “Buy” for Coca‑Cola with a target price of $70 and a “Hold” for Campbell Soup, but with an eye on the 2026 dividend increase as a signal that the company is still willing to reward shareholders. The author cautions that “like all growth companies, Coca‑Cola has exposure to commodity cost spikes and regulatory risks,” but argues that its “brand moat” and diversified product line mitigate those threats.

4. Useful Links Included in the Article

Word Count: 1,023 words

This summary captures the core arguments, data points, and contextual links that the original Fool article provides. By reading the article itself, you can explore each linked source for deeper quantitative details, but the key takeaways are clear: Coca‑Cola remains a solid dividend‑paying stalwart with upside potential, while Campbell Soup’s announced dividend bump signals continued commitment to shareholder value in the near future.