Dividend investing is an excellent strategy for (at least) two reasons. Companies that can provide consistent payouts generally have robust underlying operations. Also, reinvesting the dividend can significantly boost long-term returns.
However, dividend stocks aren't all equal -- it's essential to put your hard-earned money in companies that are unlikely to reduce or slash their payouts anytime soon, preferably ever. Here are two companies that can pull it off: Amgen (AMGN -4.30%) and Coca-Cola (KO -4.21%).
1. Amgen
Amgen paid its first dividend in 2011. Since then, it has increased its payouts consistently:
AMGN Dividend data by YCharts.
The biotech could keep that up for a long time, given its excellent prospects. Amgen is a leading drugmaker with a lineup of medicines across many therapeutic areas. In 2024, the company had 13 products that each generated more than $1 billion in sales.
True, some of them are losing steam due to competition, whether biosimilar or otherwise, but others are stepping up. In 2024, Amgen recorded $972 million in sales (increasing 71% year over year) from its asthma medicine, Tezspire, the rights to which it shares with AstraZeneca. This therapy recently aced a phase 3 study for the treatment of chronic rhinosinusitis (inflamed sinuses), so expect a label expansion in this indication. Several more of the company's medicines should earn plenty of new indications.
Amgen is also developing brand-new ones. Amgen's work in the weight management market has been noteworthy of late. Though the company's leading candidate in this field, MariTide, didn't quite live up to market expectations in a phase 2 clinical trial, it's too early to give up on this project. The company is running two phase 3 studies for MariTide in obesity and diabetes.
NASDAQ: AMGN
Key Data Points
Amgen's work goes far beyond MariTide; its late-stage pipeline alone features 33 programs. Thanks to its large portfolio of investigational products, the company looks set to develop newer medicines consistently and deliver strong financial results, helping support its excellent dividend program. Amgen is highly unlikely to suspend or even cut its payouts anytime soon, making it an excellent pick for income seekers.
2. Coca-Cola
Beverage behemoth Coca-Cola has increased its payouts for 63 consecutive years; this makes it part of the elite club of Dividend Kings. You can count on two hands the number of companies with a more impressive streak than Coca-Cola in this department.
However, the past can't tell us everything. Even if Coca-Cola has had an incredible dividend history, we still need to do more work and look at the company's business and prospects. Fortunately, investors have little to fear.
That's not because Coca-Cola doesn't face any headwinds -- it has had its share of problems in the past few years, including severe pandemic-related disruptions to its business that led to significant drops in the company's sales. However, Coca-Cola survived that ordeal and has a business well-equipped to continue thriving for a long time.
Coca-Cola has a deep portfolio of products. While it's best known for its soft drinks, it offers options in most categories consumers can find on the shelves of local grocery stores, from water and tea to juice and coffee, sports drinks, and even some alcoholic options.
NYSE: KO
Key Data Points
The company operates in more than 200 countries worldwide. Coca-Cola benefits from a powerful competitive advantage: a strong brand name that most people worldwide recognize and immediately trust. Coca-Cola caters to all kinds of customers, and adapts its strategy based on market demands in various regions.
And when consumer preferences change, Coca-Cola is flexible enough to modify its product portfolio accordingly. These factors have allowed the company to generate consistent revenue and earnings for a long time, and its strong standing in its industry should allow it to keep things going. The streak is alive and well. Coca-Cola has what it takes to maintain a growing dividend program for many years to come.
