Coca-Cola Is Crushing the S&P 500 and Nasdaq-100. But There’s an Even Better Reason to Buy the Stock in July
Daniel Foelber, The Motley Fool
Sat, July 11, 2026 at 11:50 PM GMT+5:30
4 min read
As of market close on July 8, the Nasdaq-100, which consists of the 100 largest non-financial companies listed on the Nasdaq stock exchange, is up a rip-roaring 16% in 2026, while the S&P 500 is up 9% year to date (YTD)
Massive gains from chip stocks Intel, Advanced Micro Devices, Marvell Technology, Micron Technology, and Sandisk, as well as semiconductor equipment manufacturers Applied Materials and Lam Research, are driving the indexes to new highs. So it may surprise investors to learn that Coca-Cola (NYSE: KO) is outperforming the Nasdaq-100 and S&P 500 with a 19% YTD return
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Coke hit a new all-time high on July 7, and some investors may feel there’s plenty of room to run from here. However, the best reason to buy the dividend stock in July isn’t its momentum, but rather what Coke delivers for investors even during times of uncertainty
As reliable as they come
Coke is producing exceptional results despite inflationary and consumer spending pressures on the consumer staples sector. In the first quarter of 2026, Coke grew net revenue by 12% thanks to higher volumes and prices. It also reported an impressive 35% operating margin — a testament to its elite supply chain, marketing, and network of bottling partners that mix, package, and distribute finished products to stores and restaurants
For the full year, Coke expects organic revenue growth of 4% to 5% and earnings per share (EPS) growth of 8% to 9%, up from $3 in 2025 EPS. The company also expects to generate a staggering $12.2 billion in free cash flow (FCF)
In February, Coke reaffirmed its spot on the list of Dividend Kings — an elite group of companies that have raised their annual payouts for at least 50 straight years — by raising its quarterly dividend from $0.51 to $0.53 per share, marking its 64th consecutive annual dividend increase. Q1 2026 was the first quarter to feature the higher dividend, which cost Coke $2.28 billion, for a run rate of $9.12 billion per year
Coke’s size and 2.6% yield give it one of the highest dividend yields among S&P 500 companies. But based on its 2026 FCF projection, Coke should still have over $3 billion left over in FCF, even when accounting for its dividend expenses
