Key Takeaways
- AbbVie raised its quarterly dividend 5.2% to $1.82 on Oct. 30; Coca-Cola held its 53-cent dividend on Oct. 15.
- Coca-Cola’s free cash flow missed its dividend in fiscal 2024 and 2025 only because of two one-off payments.
- AbbVie’s dividends took 65% of free cash flow in fiscal 2025, up from 41% in fiscal 2022.
- AbbVie trades at 19x forward earnings, well above its five-year average of 14x.
AbbVie (ABBV) raised its quarterly dividend 5.2% to $1.82 a share on Oct. 30, payable from Feb. 16, 2027.
Coca-Cola (KO) declared its 53-cent quarterly dividend on Oct. 15, and on Nov. 9 the yields were close: 2.2% for Coca-Cola, 2.5% for AbbVie.
If I could own only one for the next 20 years, which would it be?
| Metric | Coca-Cola (KO) | AbbVie (ABBV) |
|---|---|---|
| Dividend yield | 2.2% | 2.5% |
| Annual dividend | $2.12 | $7.28 |
| Dividend growth, fiscal 2020-2025 | 4.5% a year | 6.6% a year |
| Cash dividend payout ratio (FY 2025) | 77% | 65% |
| Net debt/EBITDA | 1.5x | 2.2x |
| Interest coverage | 10.7x | 8.2x |
| Forward P/E | 28x | 19x |
Source: TIKR and StockAnalysis, Nov. 9, 2026. Yields use latest declared dividends. *Excludes Coca-Cola’s $6.1 billion fairlife payment.
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Coca-Cola’s Cash Is Coming Back
Coca-Cola’s business is growing: third-quarter revenue rose 7% to $13.4 billion, with volume up 5%. Its free cash flow has been lumpier, falling short of the dividend in four of the last ten fiscal years:
The two recent misses were one-offs. A $6.0 billion IRS deposit cut 2024’s free cash flow to $4.7 billion, and a $6.1 billion fairlife payment cut 2025’s to $5.3 billion. Without them, dividends took 77% of free cash flow in both years.
This year is cleaner: $11.4 billion of free cash flow through the third quarter, and full-year guidance raised to at least $13.0 billion, from $12.4 billion. The soft spot is pricing. Price/mix grew just 1% last quarter, short of the 2 to 3 points the company aims for.
AbbVie Has More Room, but Less Than It Used To
AbbVie’s third-quarter revenue rose 10.3% to $17.4 billion as Skyrizi grew 22.7%, more than making up for a 31.2% drop in Humira. Its free cash flow has covered the dividend every year since fiscal 2016, but the gap has narrowed:
Free cash flow fell from $24.3 billion in fiscal 2022 to $17.8 billion in fiscal 2025 while dividends rose from $10.0 billion to $11.7 billion, lifting the payout from 41% to 65%, still comfortable. Net debt sits at 2.2x EBITDA, which AbbVie aims to cut to 2x within 2 to 3 years, and Imbruvica faces Inflation Reduction Act pricing.
So Which Dividend Wins?
AbbVie. Over 20 years, I want the dividend with the most room to grow, and AbbVie has the wider cushion and the faster growth: 6.6% a year from fiscal 2020 to fiscal 2025, against 4.5% at Coca-Cola.
At those rates and the Nov. 9 yields, $10,000 in AbbVie would pay about $9,725 over 20 years, against about $6,920 in Coca-Cola. AbbVie’s year-20 check, about $832, would be an 8.3% yield on today’s $10,000.
You do pay up for it. AbbVie trades at 19x forward earnings, near its five-year high of 20x (Coca-Cola sits at 28x):
Coca-Cola’s dividend isn’t in danger. It has been raised 64 years in a row, its net debt is low at 1.5x EBITDA, and no drug-pricing law can touch a can of Coke. “I believe our balance sheet today is in as good a shape as it’s been for many years,” president and CFO John Murphy said on the third-quarter call. If its cash recovery holds into 2027, when it gives guidance with its fourth-quarter report, I’d look again.
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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!
