My Top Dividend Growth Stock to Buy in July and Hold Forever

As the nation celebrates its 250th birthday and people head to the beach, it's also a good time to do a mid-year review of your investments. For investors seeking dividend growth, **Coca-Cola **(KO +1.27%) stands out. Here's why this company belongs in your forever portfolio.

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A payout you can count on

Coca-Cola has built an impressive track record of raising dividends. When the board of directors hiked the quarterly payout earlier this year, it brought the company's streak to 64 straight years. That makes Coca-Cola a Dividend King, an illustrious group of stocks that have increased their dividends for at least 50 straight years.

Shares of the iconic beverage maker currently pay a quarterly rate of $0.53 per share, 4% higher than the previous $0.51 per share. The $2.12 annualized rate works out to a 2.5% dividend yield. That's much higher than the S&P 500 index's 1.1% yield.

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NYSE: KO

Coca-Cola

Today's Change

(1.27%) $1.05

Current Price

$84.01

Key Data Points

Market Cap

$357BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$83.91 - $85.67

52wk Range

$65.35 - $85.67

Volume

656.4K

Avg Vol

16.7M

Gross Margin

61.82%

Dividend Yield

2.51%

Of course, investors want to make sure a company can continue paying dividends. Fortunately, Coca-Cola passes this test.

The company has a payout ratio of 65%. That's an important measure since it compares dividends to earnings. The ratio shows Coca-Cola has plenty of cushion to make payouts. And it keeps growing the bottom line, including a 15% year-over-year increase in first-quarter adjusted earnings per share.

A long history of dividend increases, the ability to continue doing so, and a better-than-market dividend yield add up to a long-term buying opportunity. Once you do, you'll enjoy those summer beach days, secure in the knowledge that Coca-Cola will continue rewarding you.