Key Takeaways
- AT&T yields 5.2% and Coca-Cola yields 2.3%, but AT&T plans to keep its $1.11 dividend flat while Coca-Cola raised its dividend 5% in fiscal 2025.
- AT&T’s dividend took 44% of its free cash flow over the latest twelve months, against 79% for Coca-Cola.
- Coca-Cola carries far less debt, and SpaceX’s push into wireless is a new risk to the cash flow behind AT&T’s dividend.
- At today’s pace, AT&T would pay more over 20 years, but Coca-Cola’s yearly check would pass AT&T’s around 2043.
AT&T (T) shares fell 8% on Oct. 23 after Bloomberg reported that SpaceX is in talks for access to at least 80,000 cell sites to build a rival wireless network. Two weeks later, on Nov. 6, Coca-Cola (KO) hit a record high while the broader market sold off.
AT&T’s 5.2% yield is more than twice Coca-Cola’s 2.3%. But over 20 years, what matters most is whether the check keeps coming and keeps growing.
So if I could hold only one for the next 20 years, which would it be?
| Metric | AT&T (T) | Coca-Cola (KO) |
|---|---|---|
| Dividend yield | 5.2% | 2.3% |
| Annual dividend | $1.11 | $2.12 |
| Dividend growth, fiscal 2020-2025 | -11.8% a year | 4.5% a year |
| Cash dividend payout ratio (TTM) | 44% | 79% |
| Net debt/EBITDA | 3.3x | 1.5x |
| Interest coverage | 3.9x | 10.7x |
| Forward P/E | 8.5x | 28x |
Source: TIKR, Nov. 9, 2026. Payout ratios are for the twelve months to Sept. 30 (AT&T) and Oct. 2 (Coca-Cola).
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AT&T’s dividend is well covered, and stuck at $1.11
AT&T is growing where it’s investing. Third-quarter revenue rose 5.3% from a year earlier to $32.3 billion, with a record 769,000 internet net adds across fiber and fixed wireless. On Oct. 21, it raised its 2026 adjusted EPS outlook to around $2.40.
AT&T’s free cash flow has covered its dividend in every year from fiscal 2016 to fiscal 2025:
Over the twelve months to Sept. 30, the dividend took a well-covered 44% of free cash flow. That leaves room for raises, but management would rather buy back stock. It plans to hold the dividend at $1.11 a share, down from $2.08 in fiscal 2020, while spending more than $24 billion on buybacks.
Debt is the weak spot. Net debt is 3.3x EBITDA over the latest twelve months, and management doesn’t expect to get back to its 2.5x target until sometime in 2029. And on Oct. 8, SpaceX agreed to buy low-band spectrum to build Starlink Mobile into a nationwide carrier. CEO John Stankey’s answer, on the third-quarter call: “the most durable customer combination in our industry is a fiber-fed broadband customer with a great wireless service on top of it, bar none.”
Coca-Cola keeps raising, on thinner coverage
Coca-Cola’s dividend is the mirror image of AT&T’s: it keeps growing, with less cash to spare. On Oct. 15, its board declared a quarterly dividend of $0.53 a share, or $2.12 a year, after dividends per share rose 5.2% to $2.04 in fiscal 2025.
Coca-Cola’s dividend payments have risen every year since fiscal 2016, but its free cash flow fell well short of them in fiscal 2024 and fiscal 2025:
Cash has bounced back since, to $11.4 billion of free cash flow in the first nine months of 2026. Still, the dividend took 79% of free cash flow over the twelve months to Oct. 2, a much thinner cushion than AT&T’s.
The business is in good shape. Third-quarter organic revenue grew 7% and comparable EPS rose 11% to $0.91, and on Oct. 27 the company raised its 2026 outlook to at least 5% organic revenue growth. Its balance sheet is far stronger than AT&T’s, too: net debt is 1.5x EBITDA, and interest coverage is 10.7x, against AT&T’s 3.9x.
So which dividend wins?
If I can hold only one for the next 20 years, it’s Coca-Cola.
Over that long a stretch, I care most about whether a dividend can keep growing through whatever comes. Coca-Cola has the balance sheet and the earnings growth to keep raising. Its normalized EPS rose from $2.69 in fiscal 2023 to $3.00 in fiscal 2025, and analysts expect $3.79 by fiscal 2028:
At its fiscal 2025 pace of 5.2% a year, $10,000 in Coca-Cola would pay about $598 in year 20. Call it a 6% yield on your original cash, before any gain in the share price, and its yearly check would pass AT&T’s around 2043.
AT&T has a strong case of its own. Its dividend is better covered, it pays more than twice the yield, and at 8.5x forward earnings it’s far cheaper than Coca-Cola at 28x. Even held flat, $10,000 in AT&T would pay about $10,400 over 20 years, against about $7,731 from Coca-Cola. But over two decades, I’d rather own the dividend that grows, backed by the stronger balance sheet, than one that’s frozen while SpaceX comes for its wireless customers.
Of course, Coca-Cola’s tax dispute with the IRS is still waiting on a court decision. A big bill there would cut into the cash behind the dividend.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
