Coca-Cola vs. Caterpillar: Which Dividend Aristocrat is Roth Ready?

For retirees considering blue-chip Dividend Aristocrats in their Roth IRA, the question is whether to choose Caterpillar (NYSE:CAT) or Coca-Cola (NYSE:KO). Both companies have raised their dividends for decades with no cuts or freezes, but they serve different investors. While both are reliable payers, the separation lies in a clean trade-off.

Coca-Cola pays a higher yield on a steadier share price, while Caterpillar has grown its dollar payout faster and delivered far superior total return across every long window. Coca-Cola yields 2.4% on a forward annualized payout of $2.12 per share, with the next distribution scheduled for October 1, 2026.

Caterpillar, on the other hand, yields just 0.8% on a forward annualized payout of $6.52, but has delivered superior dollar-dividend growth and total return. Over one year, Caterpillar returned 80.5%, while Coca-Cola's was 34.5%. Over five years, its 339.7% compared to 86.7%, respectively.

The choice for a Roth IRA investor hinges on whether they prioritize income or long-term growth. While both companies have strong dividend histories, the cyclicality of Caterpillar's earnings and payout growth presents a genuine risk in a long-dated account.