Buffett Favors Stocks with Sustainable Dividends
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Source: NASDAQ.COM
- Coca-Cola's Dividend Potential: Coca-Cola paid $816 million in dividends in 2025, with expectations for further growth in 2026, showcasing strong dividend capacity backed by a 63-year history of increases and a reasonable payout ratio of 69% amidst stable cash flows.
- Robust Financial Performance: The company reported an adjusted operating margin of 31.9% in Q3 2025, a 120 basis point increase year-over-year, driven by 6% organic revenue growth, highlighting the strength of its brand portfolio and market adaptability.
- Domino's Growth Outlook: Buffett began acquiring Domino's shares in mid-2024, with analysts projecting an 11% rise in earnings per share for 2026, while its sub-40% payout ratio provides ample room for future dividend increases, having averaged 17.4% growth over the past five years.
- Competitive Market Advantage: Domino's achieved an 8.7% increase in carryout sales through strategic partnerships with delivery platforms and a fortressing strategy, demonstrating success in enhancing customer convenience and profitability in a competitive landscape.
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Analyst Views on KO
Wall Street analysts forecast KO stock price to rise
14 Analyst Rating
13 Buy
1 Hold
0 Sell
Strong Buy
Current: 79.000
Low
71.00
Averages
79.33
High
85.00
Current: 79.000
Low
71.00
Averages
79.33
High
85.00
About KO
The Coca-Cola Company is a beverage company. The Company's segments include Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Global Ventures; and Bottling Investments. It sells multiple brands across several beverage categories worldwide. Its portfolio of sparkling soft drink brands includes Coca-Cola, Sprite and Fanta. Its water, sports, coffee and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa, Georgia, Fuze Tea, Gold Peak and Ayataka. Its juice, value-added dairy and plant-based beverage brands include Minute Maid, Simply, innocent, Del Valle, fairlife and AdeS. It operates in two lines of business: concentrate operations and finished product operations. Its concentrate operations sell beverage concentrates, syrups, including fountain syrups, and certain finished beverages to authorized bottling operations. Its finished product operations sell sparkling soft drinks and a variety of other finished beverages.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Investment Opportunities in Coca-Cola and Realty Income Amid Market Sell-Off
- Coca-Cola Sales Growth: In 2025, Coca-Cola's sales grew by 5% after adjusting for foreign currency effects and acquisitions, with price/mix contributing 4 percentage points and concentrate sales adding 1 percentage point, indicating sustained brand strength and market share growth despite inflationary pressures.
- Coca-Cola Dividend History: Coca-Cola has raised its dividend for 63 consecutive years, with the most recent increase exceeding 5%, and a payout ratio of 67% suggests the company has ample profits to support its dividends, making it attractive for long-term investors.
- Realty Income Stability: Realty Income reported an occupancy rate of nearly 99% in the third quarter and achieved a 3.5% rental rate increase on expiring leases, demonstrating resilience in the face of online retail threats and economic cycles.
- Realty Income Dividend Performance: Realty Income boasts a 5% dividend yield and has raised its dividends multiple times over the past 113 quarters, highlighting its stable cash flow as a REIT and its appeal to income-seeking investors.
See More
Alphabet's Strong Performance in the AI Market
- Market Share Growth: Alphabet's Google Gemini has captured 21% of the enterprise large language model market and is poised to surpass ChatGPT's 27% share by 2025, demonstrating its competitive edge and market leadership in the AI sector.
- Strong Financial Performance: In 2025, Alphabet generated $402.8 billion in revenue, a 15% increase year-over-year, with operating income nearing $130 billion and an operating margin of 32%, indicating robust profitability amid ongoing growth.
- Capital Expenditure Plans: Alphabet anticipates capital expenditures of $175-$185 billion for 2026, exceeding analyst expectations; however, with $30.7 billion in cash reserves and strong profitability, the company is well-positioned to support its data center expansion.
- Long-Term Debt Financing: Alphabet aims to raise $20 billion through the issuance of 100-year bonds, and despite its long-term debt of $46.5 billion, the company's diversified revenue streams and strong cash flow provide a solid financial foundation for taking on additional debt.
See More
Alphabet's AI Investment and Financial Outlook
- Significant Revenue Growth: Alphabet's revenue reached $402.8 billion in 2025, marking a 15% increase, indicating a robust financial position supported by diversified revenue streams that can sustain future investments.
- Capital Expenditure Plans: Anticipated capital expenditures for 2026 are projected to be between $175 billion and $185 billion, exceeding analyst expectations; despite the high costs of building data centers, Alphabet's cash reserves grew by 30% to $30.7 billion, showcasing its financial strength.
- AI Market Share Increase: Google Gemini has captured 21% of the enterprise large language model market and is poised to surpass ChatGPT, reflecting Alphabet's growing competitiveness in the AI sector, which could lead to higher revenue streams.
- Long-term Debt Financing: Alphabet plans to raise $20 billion through the issuance of 100-year bonds; while its long-term debt stands at $46.5 billion, its strong profitability and diversified revenue sources enable effective debt risk management.
See More
Consumer Staples Benefit from Market Rotation in 2026
- Sector Performance: In 2026, the consumer staples sector has surged over 15.5% in the S&P 500, becoming the third-best performing sector, indicating a growing investor preference for defensive stocks amid a market rotation.
- Valuation Surge: Wolfe Research noted that market-weighted valuations for consumer staples have reached their highest levels since the 1990s, reflecting increased investor confidence in the sector despite a lackluster overall market performance.
- Walmart's Market Position: Walmart's stock jumped 20% in 2026, allowing it to join the $1 trillion market cap club, showcasing its adaptability in the AI economy and solidifying its leading position in retail.
- Future Outlook: Analysts predict that as consumer demand rebounds in 2026, the fundamentals for the consumer staples sector are likely to improve, particularly with potential tax relief for lower-income households boosting product demand.
See More
Three Dividend Stocks to Hold for 20 Years
- AbbVie's Dividend Growth: AbbVie (ABBV), a Dividend King, has raised its dividend for 54 consecutive years, with a current yield of 3.1%, demonstrating its ability to rebound from patent expirations and maintain growth, making it a solid hold for the next 20 years.
- Coca-Cola's Stability: Coca-Cola (KO) is also a Dividend King, having increased its dividend for 63 years, with a yield of 2.6%, as the company has successfully adapted to market changes, marketing 30 brands with annual sales exceeding $1 billion, and is expected to continue its dividend increases.
- Realty Income's High Yield: Realty Income (O), while not a Dividend King, has raised its dividend for 30 years, boasting a yield over 5%, with Q3 adjusted funds from operations at $1.08 per share, significantly above the $0.807 in dividends paid, indicating strong funding capabilities for its dividend program.
- Low Volatility Investment Choice: Realty Income has a beta of 0.5 since its NYSE listing in 1994, reflecting low volatility, and combined with its high dividend yield, it presents an excellent long-term investment option for those seeking stable income.
See More
Coca-Cola and PepsiCo: Attractive Dividend Stocks
- Coca-Cola's Brand Strength: Coca-Cola stands out as a top dividend stock with a 63-year dividend growth streak and strong brand power, reporting a 1% year-over-year increase in unit case volume while adjusted revenue rose by 6% in Q3, showcasing its pricing power and market share gains.
- Stable Dividend Yield: The current quarterly dividend of $0.51, annualized to $2.04, yields 2.60%, and is expected to grow in line with earnings, which analysts project will increase at a 6% annualized rate over the long term, making it a solid income investment.
- PepsiCo's Growth Potential: With 60 consecutive years of dividend payments, PepsiCo benefits from a strong brand portfolio and global distribution network, achieving over 5% revenue growth despite macroeconomic challenges, alongside an 11% increase in adjusted earnings per share.
- Proactive Investment Strategy: PepsiCo plans to pay $5.92 in dividends per share over the next year, with a forward dividend yield of 3.52%, representing 69% of analysts' 2026 earnings estimates, providing an attractive proposition for income investors.
See More
Investment Opportunities in Coca-Cola and Realty Income Amid Market Sell-Off
- Coca-Cola Sales Growth: In 2025, Coca-Cola's sales grew by 5% after adjusting for foreign currency effects and acquisitions, with price/mix contributing 4 percentage points and concentrate sales adding 1 percentage point, indicating sustained brand strength and market share growth despite inflationary pressures.
- Coca-Cola Dividend History: Coca-Cola has raised its dividend for 63 consecutive years, with the most recent increase exceeding 5%, and a payout ratio of 67% suggests the company has ample profits to support its dividends, making it attractive for long-term investors.
- Realty Income Stability: Realty Income reported an occupancy rate of nearly 99% in the third quarter and achieved a 3.5% rental rate increase on expiring leases, demonstrating resilience in the face of online retail threats and economic cycles.
- Realty Income Dividend Performance: Realty Income boasts a 5% dividend yield and has raised its dividends multiple times over the past 113 quarters, highlighting its stable cash flow as a REIT and its appeal to income-seeking investors.
See More
Alphabet's Strong Performance in the AI Market
- Market Share Growth: Alphabet's Google Gemini has captured 21% of the enterprise large language model market and is poised to surpass ChatGPT's 27% share by 2025, demonstrating its competitive edge and market leadership in the AI sector.
- Strong Financial Performance: In 2025, Alphabet generated $402.8 billion in revenue, a 15% increase year-over-year, with operating income nearing $130 billion and an operating margin of 32%, indicating robust profitability amid ongoing growth.
- Capital Expenditure Plans: Alphabet anticipates capital expenditures of $175-$185 billion for 2026, exceeding analyst expectations; however, with $30.7 billion in cash reserves and strong profitability, the company is well-positioned to support its data center expansion.
- Long-Term Debt Financing: Alphabet aims to raise $20 billion through the issuance of 100-year bonds, and despite its long-term debt of $46.5 billion, the company's diversified revenue streams and strong cash flow provide a solid financial foundation for taking on additional debt.
See More
Alphabet's AI Investment and Financial Outlook
- Significant Revenue Growth: Alphabet's revenue reached $402.8 billion in 2025, marking a 15% increase, indicating a robust financial position supported by diversified revenue streams that can sustain future investments.
- Capital Expenditure Plans: Anticipated capital expenditures for 2026 are projected to be between $175 billion and $185 billion, exceeding analyst expectations; despite the high costs of building data centers, Alphabet's cash reserves grew by 30% to $30.7 billion, showcasing its financial strength.
- AI Market Share Increase: Google Gemini has captured 21% of the enterprise large language model market and is poised to surpass ChatGPT, reflecting Alphabet's growing competitiveness in the AI sector, which could lead to higher revenue streams.
- Long-term Debt Financing: Alphabet plans to raise $20 billion through the issuance of 100-year bonds; while its long-term debt stands at $46.5 billion, its strong profitability and diversified revenue sources enable effective debt risk management.
See More
Consumer Staples Benefit from Market Rotation in 2026
- Sector Performance: In 2026, the consumer staples sector has surged over 15.5% in the S&P 500, becoming the third-best performing sector, indicating a growing investor preference for defensive stocks amid a market rotation.
- Valuation Surge: Wolfe Research noted that market-weighted valuations for consumer staples have reached their highest levels since the 1990s, reflecting increased investor confidence in the sector despite a lackluster overall market performance.
- Walmart's Market Position: Walmart's stock jumped 20% in 2026, allowing it to join the $1 trillion market cap club, showcasing its adaptability in the AI economy and solidifying its leading position in retail.
- Future Outlook: Analysts predict that as consumer demand rebounds in 2026, the fundamentals for the consumer staples sector are likely to improve, particularly with potential tax relief for lower-income households boosting product demand.
See More
Three Dividend Stocks to Hold for 20 Years
- AbbVie's Dividend Growth: AbbVie (ABBV), a Dividend King, has raised its dividend for 54 consecutive years, with a current yield of 3.1%, demonstrating its ability to rebound from patent expirations and maintain growth, making it a solid hold for the next 20 years.
- Coca-Cola's Stability: Coca-Cola (KO) is also a Dividend King, having increased its dividend for 63 years, with a yield of 2.6%, as the company has successfully adapted to market changes, marketing 30 brands with annual sales exceeding $1 billion, and is expected to continue its dividend increases.
- Realty Income's High Yield: Realty Income (O), while not a Dividend King, has raised its dividend for 30 years, boasting a yield over 5%, with Q3 adjusted funds from operations at $1.08 per share, significantly above the $0.807 in dividends paid, indicating strong funding capabilities for its dividend program.
- Low Volatility Investment Choice: Realty Income has a beta of 0.5 since its NYSE listing in 1994, reflecting low volatility, and combined with its high dividend yield, it presents an excellent long-term investment option for those seeking stable income.
See More
Coca-Cola and PepsiCo: Attractive Dividend Stocks
- Coca-Cola's Brand Strength: Coca-Cola stands out as a top dividend stock with a 63-year dividend growth streak and strong brand power, reporting a 1% year-over-year increase in unit case volume while adjusted revenue rose by 6% in Q3, showcasing its pricing power and market share gains.
- Stable Dividend Yield: The current quarterly dividend of $0.51, annualized to $2.04, yields 2.60%, and is expected to grow in line with earnings, which analysts project will increase at a 6% annualized rate over the long term, making it a solid income investment.
- PepsiCo's Growth Potential: With 60 consecutive years of dividend payments, PepsiCo benefits from a strong brand portfolio and global distribution network, achieving over 5% revenue growth despite macroeconomic challenges, alongside an 11% increase in adjusted earnings per share.
- Proactive Investment Strategy: PepsiCo plans to pay $5.92 in dividends per share over the next year, with a forward dividend yield of 3.52%, representing 69% of analysts' 2026 earnings estimates, providing an attractive proposition for income investors.
See More
