Dividend stocks have been riskier than ever before in 2020. With many businesses struggling amid the pandemic, many companies have opted to cut or just outright suspend their payouts. And that means investors who were relying on that recurring dividend income are left holding underperforming stocks with no payouts.
It's a painful reminder of how important it is to invest in dividend stocks that have stable payouts and that you can count on for the long term.
A good example of that is The Coca-Cola Company (NYSE:KO), which has raised its dividend payments for 58 years in a row. The company's most recent hike was 2.5%, which Coca-Cola announced in February.
Investors today are receiving $0.41 every quarter, earning an annual yield of 3.1%. If you were to invest $10,000 into Coca-Cola, that would be at least $311 in dividend income you'd be collecting over the next year.
Even though the company's having a tough year due to COVID-19, its numbers are still relatively stable. Year-to-date revenue of $24.4 billion is down 13.5% year over year but its net income of $6.3 billion has fallen by a more modest 8.5% overall.
Another encouraging sign is that it's still generating ample cash to support its payouts. Through the first nine months of the year, Coca-Cola's cash from operations has totaled $7.8 billion, and that's been more than enough to cover investing expenditures of $3.9 billion and dividend payments of $3.4 billion.
With a stable business and decent yield, Coca-Cola's one of the better, more stable investments you can put into your portfolio today.
