Coca-Cola vs. Sirius XM: Which Is the Better Dividend Growth Stock to Buy Now?
AInvestTuesday, Dec 10, 2024 4:59 am ET
7min read
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When it comes to dividend growth stocks, two prominent names often come to mind: Coca-Cola (KO) and Sirius XM (SIRI). Both companies have strong track records and offer attractive yields, but which one is the better choice for investors looking to buy now? Let's dive into the details and compare these two dividend powerhouses.



Coca-Cola: A Timeless Classic

Coca-Cola is a household name with a 62-year annual dividend-raising streak. The company's iconic brands, such as Coca-Cola, Diet Coke, and Sprite, have stood the test of time and continue to generate billions in annual sales. Despite declining soda demand, Coca-Cola has adapted by expanding its portfolio to include 12 billion-dollar brands in water, sports, and tea categories.

In the first nine months of 2024, Coca-Cola's organic revenues rose 12% year over year, driven primarily by pricing. The company's strong brand recognition and pricing power enable it to maintain a 3.1% dividend yield at recent prices.



Sirius XM: Rapid Payout Bumps

Sirius XM, America's only provider of satellite radio, has more than doubled its dividend payout since 2019. The company's rapid dividend growth is a testament to its strong financial performance and commitment to returning cash to shareholders. Sirius XM's dividend offers a 3.3% yield at recent prices, and another payout bump announcement is likely around the corner.

Sirius XM's dividend growth is supported by its growing subscriber base and increasing revenue. The company's exclusive content and unique offerings continue to attract new subscribers, driving revenue growth and cash flow.



Which Stock Is the Better Choice?

Both Coca-Cola and Sirius XM offer attractive dividend yields and strong growth prospects. However, Coca-Cola's long history of dividend growth and diverse revenue streams make it a more stable choice for long-term investors. Sirius XM's rapid dividend growth is impressive, but its reliance on a single business model may make it more susceptible to market fluctuations.

Ultimately, the choice between Coca-Cola and Sirius XM depends on your investment goals and risk tolerance. Both stocks are worth considering for dividend-focused portfolios, but Coca-Cola's timeless appeal and diversified revenue streams may give it the edge in the long run.

In conclusion, both Coca-Cola and Sirius XM are attractive dividend growth stocks, but Coca-Cola's long history of dividend growth and diversified revenue streams make it a more stable choice for long-term investors. Sirius XM's rapid dividend growth is impressive, but its reliance on a single business model may make it more susceptible to market fluctuations. When deciding which stock to buy now, consider your investment goals and risk tolerance, and choose the one that best aligns with your portfolio objectives.
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