Coca-Cola Edges Out Altria Group as Top Dividend Play

Altria Group's high yield of 6.5% might make it an attractive option for dividend investors, but closer examination reveals that the company may not be the best choice for those seeking reliable passive income.

The tobacco giant has raised its dividends annually for over 50 years, making it a Dividend King with a payout ratio of 89%. However, its revenue growth has been uninspiring due to faltering demand for cigarettes, with volume declining 2.7% despite a 3.5% increase in sales.

Coca-Cola, on the other hand, presents a more promising opportunity for dividend investors. Despite struggling with volume growth, the company's second-quarter revenue rose 5%, driven by higher volumes and price/mix effects. Coca-Cola has also been growing its profit, with operating income increasing 6% year-over-year.

The beverage giant's strong business prospects and consistent dividend history make it a more attractive option for investors seeking reliable passive income. With a dividend yield of 2.4%, Coca-Cola may not offer the same high yield as Altria Group, but its above-market yield and steady sales growth make it a better choice for long-term investors.