Key Takeaways
- Verizon yields 6.1% and Coca-Cola 2.3%, so $10,000 in each pays $607 and $230 a year today.
- Verizon’s dividend used 52% of its free cash flow over the twelve months to Sept. 30, 2026, against 79% for Coca-Cola, whose free cash flow fell short of its dividend in fiscal 2024 and fiscal 2025.
- Coca-Cola grew its dividend 4.5% a year from fiscal 2020 to fiscal 2025, against 1.9% for Verizon, and carries far less debt.
- SpaceX’s push into wireless is Verizon’s main risk, and a pending IRS tax ruling with up to $14 billion at stake is Coca-Cola’s.
Retirees hunting for income have had a rough October with Verizon (VZ). On Oct. 9, SpaceX agreed to buy a nationwide block of spectrum for its Starlink Mobile cell service, and Verizon fell 9%, its worst day since 2002.
Coca-Cola (KO) had the opposite month. It raised its free cash flow guidance on Oct. 27, and its stock returned 43% over the year to Nov. 2.
That leaves Verizon yielding 6.1% and Coca-Cola 2.3%. For a retiree who wants a check they can count on, which is the better buy?
| Metric | Verizon (VZ) | Coca-Cola (KO) |
|---|---|---|
| Dividend yield | 6.1% | 2.3% |
| Annual dividend | $2.83 a share | $2.12 a share |
| Dividend growth, fiscal 2020-2025 | 1.9% a year | 4.5% a year |
| Cash dividend payout ratio (TTM) | 52% | 79% |
| Net debt / EBITDA | 3.3x | 1.5x |
| Interest coverage | 4.3x | 10.7x |
Source: TIKR and StockAnalysis, Nov. 5, 2026. TTM to Sept. 30, 2026 (Verizon) and Oct. 2, 2026 (Coca-Cola).
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Verizon’s cash keeps climbing
Verizon’s dividend is well-covered. Over the twelve months to Sept. 30, 2026, it took 52% of free cash flow: $11.72 billion out of $22.38 billion.
Free cash flow has topped the dividend every year since fiscal 2018:
Mobility and broadband service revenue rose 2.9% to $23.5 billion in the third quarter of 2026 from a year earlier, and Verizon now expects 2026 free cash flow to grow nearly 12%, up from its earlier 9% to 10%.
Management said on the third-quarter call that it remains “committed to growing the dividend”, and a 52% payout leaves room for that. The dividend just hasn’t grown much: 1.9% a year from fiscal 2020 to fiscal 2025, from $2.48 to $2.73 a share, while Verizon pays down net debt that still sits at 3.3x EBITDA.
The main risk is SpaceX. SpaceX President Gwynne Shotwell said on its Oct. 20 call that it’s targeting service on its own airwaves for early 2028. That would put a new rival after the wireless customers whose bills fund this dividend.
Coca-Cola’s cash is coming back
Coca-Cola also pays from free cash flow, with much less to spare. Over the twelve months to Oct. 2, 2026, its dividends took a fuller 79% of free cash flow: $11.23 billion out of $14.28 billion.
That ratio was 166% in fiscal 2025. Free cash flow fell from $9.75 billion in fiscal 2023 to $4.74 billion in fiscal 2024 and $5.30 billion in fiscal 2025, short of the $8.36 billion and $8.78 billion it paid in dividends:
Free cash flow reached $11.4 billion in the first nine months of 2026, and on Oct. 27 Coca-Cola raised its full-year guidance to at least $13.0 billion. Third-quarter revenue grew 7% to $13.4 billion over the same period.
The dividend grew 4.5% a year from fiscal 2020 to fiscal 2025, from $1.64 to $2.04 a share. Coca-Cola’s balance sheet is also far stronger than Verizon’s, with net debt at 1.5x EBITDA. CFO John Murphy said on the third-quarter call: “I believe our balance sheet today is in as good a shape as it’s been for many years.”
The main risk is the IRS. Coca-Cola expects a court ruling on its long-running tax dispute in the coming months, with a potential $14 billion of extra tax and interest for 2010 through 2025 at stake.
So which dividend wins?
For retirees, Verizon is the better dividend stock. It pays far more income and covers it better. $10,000 in Verizon pays $607 a year today, against $230 in Coca-Cola, on a 52% payout against 79%.
Even at its faster pace, Coca-Cola’s income wouldn’t pass Verizon’s for more than 30 years. At each company’s five-year rate, $10,000 in Coca-Cola would pay about $341 in year 10, a 3.4% yield on today’s cash, against about $722 for Verizon. (Capital appreciation counts too, of course.)
Retirees aren’t paying up for Verizon’s yield, either. Its forward P/E is 8.7x, right at its five-year average of 8.8x and down from 10.5x in March:
Coca-Cola trades at 28x.
This isn’t to say Coca-Cola’s dividend is unsafe. Its free cash flow is recovering, its balance sheet is the stronger of the two, and its dividend has grown more than twice as fast. It’s just that for a retiree living on the check, I’d rather have Verizon’s.
Of course, SpaceX could change that. If Starlink Mobile launches on its own airwaves in early 2028 and starts taking customers, Verizon’s free cash flow is the number to watch.
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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!
