Coca-Cola owes its remarkable dividend streak to its brand name, pricing power, and new products.
Pfizer is struggling right now, but its future looks bright considering recent moves and a cheap valuation.
10 stocks we like better than Coca-Cola ›
The stock market caters to investors with almost any budget, especially with online brokers offering commission-free trading and fractional shares. Even with a modest sum, you can find quality stocks across many investing styles: growth, value, buy-and-hold, and, of course, dividend-oriented.
While many of the top income stocks on the market are expensive, some can be had for well under $100 per share. Here are two examples: Coca-Cola(NYSE: KO) and Pfizer(NYSE: PFE).
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Any company capable of increasing its dividend for 63 consecutive years, as Coca-Cola has done, is worth serious consideration for income investors. The company has achieved this rare streak thanks to several factors, including a genius marketing ability that made it one of the most recognizable brands in the world.
Coca-Cola now doesn’t need to work quite as hard to attract willing buyers. And its products remain in relatively high demand regardless of economic conditions, allowing it to continue increasing its dividend even when the economy isn’t doing well or during bear markets. That’s precisely what dividend seekers want.
But there’s more. Coca-Cola has many tools in its arsenal that allow it to continue growing revenue and earnings at a decent clip while maintaining strong margins. One of them is to launch new products or brands as consumers grow tired of older ones. This helps inject some excitement into an otherwise “boring” business. New products it has launched over the past two years under well-known brands include Coca-Cola Spiced and Simply Pop, a line of prebiotic sodas.
It’s hard for newcomers to steal significant market share from Coca-Cola. Whatever innovation they come up with, the beverage giant can launch its own version that’s almost guaranteed to be more successful, given its brand name. That’s how it has built an extensive portfolio of products across almost every beverage category in existence.
Something else Coca-Cola routinely does is raise prices on various items, which can help it fend off threats like tariff impacts. And once again, it can do so without losing significant sales, which provides more evidence of its incredibly strong business.
These (and other) factors explain Coca-Cola’s long and storied track record, and the company still has many years of dividend increases ahead. Meanwhile, shares are trading at just under $69 apiece. At that price, there aren’t many better dividend stocks to buy and hold for a long time.
Pfizer’s financial results have been pretty bad in recent years, and that continues to be the case. Revenue in the third quarter declined 6% year over year to $16.7 billion, while adjusted earnings per share fell 18% to $0.87. Yet the pharmaceutical giant reaffirmed its revenue guidance and raised its earnings guidance for the full year 2025.
One reason Pfizer’s bottom line could come in ahead of its own expectations is that cost-cutting initiatives are going even better than expected. The company projects that it will achieve net cost savings of $7.2 billion by the end of 2027. Meanwhile, a recent deal it made with the U.S. government will allow it to avoid tariffs for three years. So, the drugmaker is making moves that will help boost operating margins and the bottom line.
But can it boost revenue growth? Pfizer has earned approval for newer products in recent years while significantly expanding its pipeline through acquisitions. We have yet to see the results of those efforts on the company’s financial results. In fairness, that won’t happen immediately, especially as it will face a patent cliff for Eliquis, an anticoagulant that’s one of its best-selling medicines, within the next few years.
Even so, at a price of about $25 per share and a recent forward price-to-earnings (P/E) ratio of 8.7 — the average for the healthcare industry is 17.1 — the stock looks cheap right now, at least for investors willing to stick with the company through the next five years and beyond as it replenishes its lineup of medicines.
Pfizer also currently offers a juicy forward yield of around 7%, well above the S&P 500‘s average of 1.2%. The stock may be down right now, but patient investors should be rewarded.
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Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy.
2 No-Brainer Dividend Stocks to Buy With $100 in November was originally published by The Motley Fool
