{"id":11827,"date":"2026-07-12T12:30:34","date_gmt":"2026-07-12T12:30:34","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=11827"},"modified":"2026-07-12T12:30:34","modified_gmt":"2026-07-12T12:30:34","slug":"bank-of-america-says-this-107-year-dividend-giant-is-on-sale","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=11827","title":{"rendered":"Bank of America says this 107-year dividend giant is on sale"},"content":{"rendered":"
<\/p>\n
It’s not often that dividend stalwarts are viewed as obviously mispriced, but Bank of America sees an exception in Coca-Cola (KO) stock<\/strong>.\u00a0<\/p>\n
For generations of investors, Coca-Cola has delivered uninterrupted dividend income, paying every year since 1920, according to Investing.com.<\/p>\n
That record stretches back long before most modern blue-chip investors were born. More importantly, Coca-Cola belongs to an elite group of companies that have raised their dividends for 63 consecutive years, earning it the moniker “Dividend King,” according to Seeking Alpha.<\/p>\n
Now, in a note shared with me, Bank of America analysts argue that investors can scoop up this dividend machine at a compelling discount ahead of a key Q2 earnings release on July 28.<\/p>\n
BofA isn\u2019t treating Coca-Cola as a tired defensive stock; in fact, it sees limited inflation exposure and ample financial flexibility to navigate macro headwinds with aplomb.\u00a0<\/p>\n
Why BofA sees a rare opening in this dividend machine<\/strong><\/h2>\n
Bank of America just gave Coca-Cola stock a big thumbs up before its Q2 earnings report.<\/p>\n
It reiterated its buy<\/strong> rating and, more importantly, raised its price target to $95<\/strong> from $90<\/strong>, implying nearly 15% upside<\/strong>.<\/p>\n
BofA\u2019s bullishness on KO stock has everything to do with the quality and durability of its resilient underlying business.\u00a0<\/p>\n
Does Micron pay dividends? Its yield and payouts explained<\/strong><\/li>\n
2 undervalued dividend stocks with growing payouts in 2026<\/strong><\/li>\n<\/ul>\n
What makes it a standout among peers is its resilient demand, limited inflation exposure, and robust balance-sheet flexibility.\u00a0<\/p>\n
Case in point: Its trailing 12-month gross margin has held steady at around 61.7%<\/strong>, or approximately 160 basis points above its five-year average of 60.1%<\/strong>, according to Seeking Alpha.\u00a0<\/p>\n
That statistic is critical, especially given the current volatility in the macroeconomic environment and the troubling comments from PepsiCo’s CEO during the company’s Q2 earnings call.\u00a0<\/p>\n
PepsiCo CEO Ramon Laguarta<\/strong> said U.S. consumer demand was weaker than the company expected due to gas prices, which pressured budgets and hurt impulse demand.<\/p>\n
\u201cIs the volume as much as we expected? No, not in Q2. It\u2019s a couple of elements. I think the consumer is worse than what we had anticipated, and it\u2019s driven mainly by gas prices,\u201d said Laguarta.<\/p>\n
Interestingly, BofA analysts argued that instead of weakness on the North American side, they feel sluggishness overseas.\u00a0<\/p>\n
The regional picture is mixed, with BofA lowering Latin America expectations to +1.4%<\/strong> but raising EMEA to +2.3%<\/strong> and Asia Pacific to +2.9%<\/strong>, helped by better trends in Japan. North America stayed steady at +1.5%<\/strong>.<\/p>\n
Overall, BofA sees a slow-growth defensive stock that the market is underpricing.\u00a0<\/p>\n\n
Bank of America sees more upside for Coca-Cola despite modest volume growth.<\/p>\n
John Nordell<\/p>\n<\/figcaption><\/figure>\n
Coca-Cola\u2019s dividend is dependable, to say the least<\/strong><\/h2>\n
Coca-Cola has been just as consistent with its dividend as it has been with the nostalgic taste of its iconic soda over the years.<\/p>\n
Seeking Alpha data credits the company with 63<\/strong> consecutive years of dividend growth, compared with a sector median of just 3<\/strong>, and 63<\/strong> consecutive years of dividend payments versus 20.5<\/strong> for the sector.\u00a0<\/p>\n
Another thing that stands out to me, especially after its recent dip (down 0.1% in the past month), is its high yield.\u00a0<\/p>\n
According to Seeking Alpha, the stock\u2019s trailing 12-month dividend yield is 2.49%<\/strong>, while its forward yield is 2.54%<\/strong>.\u00a0<\/p>\n
These figures measure dividends paid over the past year compared to its current share price, while the forward yield uses the expected annual dividend.<\/p>\n
Interestingly, both figures are sitting below the consumer staples sector. The sector\u2019s median trailing yield is 3.28%<\/strong>, meaning Coca-Cola yields 24%<\/strong> lower, while its forward yield is 21.6%<\/strong> below the sector median of 3.24%<\/strong>.\u00a0<\/p>\n
Coca-Cola\u2019s dividend increased 4.8%<\/strong> over the past year, comfortably ahead of the sector median of 2.82%<\/strong>, with its three-year dividend growth rate at 4.94%<\/strong>, tracking ahead of\u00a0 Coca-Cola\u2019s averages.<\/p>\n
Another metric that stands out to me is its cash-flow payout ratio, at 61%<\/strong>, indicating the dividend remains covered by underlying cash generation.<\/p>\n
The key numbers behind BofA\u2019s $95 price target<\/strong><\/h2>\n
\n
BofA\u2019s new $95<\/strong> price target, up from $90<\/strong>, implies a 15% upside<\/strong> from the $82.63<\/strong> share price, indicating considerable room for growth in an otherwise defensive consumer staples stock.<\/li>\n
The volume setup is steady, with BofA expecting Q2 unit case volume growth of 2%<\/strong>, close to Visible Alpha’s consensus of 2.2%<\/strong>.<\/li>\n
The earnings path backs up the potential rerating case, with EPS projected to rise from $3.27 in 2026<\/strong> to $3.50 in 2027<\/strong> and $3.75 in 2028<\/strong>.<\/li>\n
The valuation call rests on a 27-times <\/strong>calendar year 2027 estimated EPS multiple, above BofA\u2019s prior 25.5-times <\/strong>assumption.<\/li>\n
The dividend case also strengthens, with DPS expected to climb from $2.11 in 2026<\/strong> to $2.30 in 2028<\/strong>. \nSource: Bank of America note on Coca-Cola stock\n<\/li>\n<\/ul>\n
What could break BofA\u2019s bullish KO case<\/strong><\/h2>\n
BofA\u2019s upside case isn\u2019t risk-free, though.<\/p>\n
The first risk is the obvious, which is the macro volatility we’re seeing in developed and emerging markets, which matters because Coca-Cola\u2019s growth engine is global.<\/p>\n
So any demand shock, sluggish consumer spending, or regional disruption will likely clip away at volume stability behind that $95<\/strong> price target.<\/p>\n
Another major risk pertains to currency. BofA flags EPS headwinds from a stronger U.S. dollar, since Coca-Cola earns a massive share of its profits from overseas operations.<\/p>\n
Naturally, that points to translation risk; if foreign sales translate into fewer dollars, earnings growth can look much weaker, even if local demand holds up.<\/p>\n
The third big risk is consumer concern around sugar and calories. It\u2019s no secret that we\u2019re now in the GLP-1 era, and scrutiny of core carbonated soft drinks has never been stronger, compelling more investment in low-sugar, zero-sugar, and non-CSD brands.<\/p>\n
Related: Starbucks taps childhood nostalgia with 5 new drinks<\/strong><\/p>\n
It’s not often that dividend stalwarts are viewed as obviously mispriced, but Bank of America sees an exception in Coca-Cola (KO) stock.\u00a0 For generations of investors, Coca-Cola has delivered uninterrupted… <\/p>\n","protected":false},"author":1,"featured_media":11828,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[13240,867,200,186,5279,1402],"class_list":["post-11827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-107year","tag-america","tag-bank","tag-dividend","tag-giant","tag-sale"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11827"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/11828"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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