Coca-Cola shares just hit a new all-time high with a 2.3% dividend yield
Coca-Cola, the beverage giant, just reached a brand-new all-time high stock price.
The short version
- Investors are paying roughly 25 times forward earnings for the shares today.
- The company also pays a 2.3% dividend yield for waiting.
- Wall Street analysts see another 12% potential upside ahead.
Check your portfolio today. Coca-Cola, the beverage giant, just watched its shares reach a brand-new all-time high while economic uncertainty grips the market. CNN's Fear and Greed Index shows extreme investor fear, inflation is resurging, and the Federal Reserve is raising interest rates.
Yet the stock keeps climbing higher. Some investors are afraid to buy a stock after it reaches a record high for fear of a sharp pullback. But history shows that when quality businesses set record highs, they tend to lead to more records.
For example, the stock kept breaking records before July 1998 and did the exact same thing after the early 2020 sell-off. According to The Motley Fool, the beverage giant's shares trade at roughly 25 times forward earnings, which is actually lower than Coke's average trailing earnings multiple over the past five years.
Wall Street analysts agree on the path forward. Peter Grom, an analyst at UBS, which is a major global bank, and Kaumil Gajrawala, an analyst at Jefferies, which is a global investment banking firm, each set a 12-month price target reflecting a 12% potential upside for the consumer staples stock.
Even if the shares pull back, the stock pays you to wait with a forward dividend yield of around 2.3%. Coca-Cola is also a member of the Dividend Kings, an elite group that has increased its dividends for at least 50 consecutive years.
For a long-term investor holding shares in an account, that steady payout keeps adding up while the market sorts itself out.
Photo: The original uploader was Autiger, Public domain, via Wikimedia Commons
