My Top Dividend Stock to Buy in July and Hold Forever

Coca-Cola (KO +0.32%) is my top dividend stock to buy right now due to its strong brand power, long record of dividend growth, and above-average yield.

Shares are up 18% year to date, outperforming the S&P 500's roughly 10% return. The stock still yields close to 2.6% based on its quarterly dividend of $0.53 per share, making it a solid dividend stock to consider right now.

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Over the past year, Coca-Cola generated nearly $50 billion in revenue and $12.5 billion in free cash flow, and paid out nearly $11 billion in dividends to shareholders. It raised its dividend 3.9% in February, marking 64 straight years of increases.

Despite high inflation hurting consumer spending, the company has reported 20 consecutive quarters of market share gains. This is a testament to its brand strength, with 32 brands contributing $1 billion in annual revenue.

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NYSE: KO

Coca-Cola

Today's Change

(0.32%) $0.27

Current Price

$84.32

Key Data Points

Market Cap

$362BMarket 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

$83.57 - $84.50

52wk Range

$65.35 - $85.68

Volume

3.5M

Avg Vol

16.8M

Gross Margin

61.82%

Dividend Yield

2.47%

However, one risk to watch is Coca-Cola stretching itself too thin. It manages over 200 brands. The upside of this strategy is that it can make it easier for management to meet demand across many occasions and price points, thereby maintaining steady revenues. The downside, however, is that it risks diluting its best-performing brands and returns on capital in the long run.

That said, the beverage industry is fairly resilient to broader macroeconomic headwinds. Coca-Cola owns dozens of valuable brands that are contributing to its free cash flows and growing dividends. The stock's above-average yield indicates solid value for income investors.