Building Wealth With Long-Term Dividend Kings: A Stock Worth Holding Indefinitely

When seeking stocks to own for decades, the decision demands careful consideration. The opportunity cost is significant, which is why selecting the right dividend-paying businesses should never be rushed. Yet there exists a compelling choice: a company combining robust operational fundamentals, an exceptional track record of shareholder rewards, and valuation that appears reasonable given current market conditions.

The Operating Business: Why Strength Matters Now

Coca-Cola (NYSE: KO) stands as a leading force in the consumer staples universe, wielding advantages in distribution networks, marketing prowess, and product innovation that rival competitors. The company’s scale enables it to consolidate industry gains through strategic acquisitions, continuously expanding its brand portfolio. Perhaps most importantly, beverages remain recession-resistant—a quality that has proved invaluable during economic downturns.

Current performance underscores this advantage. During Q3 2025, Coca-Cola achieved 6% organic sales growth with comparable earnings expansion. By contrast, PepsiCo managed merely 1.3% organic sales growth while earnings contracted 2%. For conservative investors prioritizing current strength over turnaround potential, this performance differential carries real weight.

The core business demonstrates resilience even as consumer preferences shift across the broader staples sector. This combination—industry leadership plus momentum in an otherwise challenging environment—creates a foundation for sustainable long-term returns.

Valuation: A Rare Fair Price in a Quality Business

Coca-Cola typically commands premium valuations, rarely appearing at attractive entry points. However, sector-wide hesitation has created an unusual opportunity. The stock’s price-to-earnings and price-to-book multiples both sit below their respective five-year averages, suggesting modest undervaluation.

When comparing valuation metrics historically, the yield and price-to-sales ratio hover near their long-term averages—neither particularly cheap nor expensive. This positioning makes the stock appear fairly valued at worst, potentially underpriced at best. For dividend-focused investors, fair pricing on a quality asset represents a meaningful buying opportunity.

Dividend History: The Dividend Kings Standard

Among dividend stocks worthy of perpetual holding, a critical filter is longevity of increases. Coca-Cola belongs to an elite group: its annual dividend increase streak spans 63 consecutive years, tying for the fifth-longest record globally.

This track record reflects consistent board philosophy prioritizing shareholder returns. When evaluating dividend kings stocks for multi-decade ownership, a 50-year minimum increase streak serves as excellent screening criteria. Coca-Cola exceeds this threshold substantially, demonstrating institutional commitment to rewarding shareholders.

Income Comparison: Yield in Context

Coca-Cola’s 2.9% dividend yield, while not the sector maximum, deserves perspective:

• S&P 500 index yield: 1.1%
• Average consumer staples yield: 2.7%
• PepsiCo yield: approximately 3.9%

Higher yields exist elsewhere, yet combining this yield with business execution creates an asymmetric risk-reward profile. The gap versus broad market yields (1.8 percentage points) justifies consideration, particularly given operational momentum.

The Investment Case: Practical Takeaway

For investors implementing a buy-and-hold-forever strategy, Coca-Cola presents several converging advantages: a well-managed business firing on all cylinders, dividend kings credentials spanning over six decades, valuation offering fair entry pricing, and yield exceeding broad market alternatives.

This is precisely the type of holding that can form the cornerstone of a long-term wealth-building portfolio. While market opportunities always exist elsewhere, the combination of business quality, financial performance, shareholder-friendly policies, and current valuation creates a legitimate case for ownership at these prices.

The stock embodies what disciplined dividend investors seek: sustainable competitive advantage, proven management priorities, and valuation not requiring perfection to succeed.