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Can any stock beat the real thing?
You may have noticed that the price of Coca-Cola has increased dramatically over the past 10 years. Investing $1,000 in Coca-Cola stock would have been a smart way to help counteract that price increase, as the company’s share price has more than doubled over that time period. Here’s a look at the actual math and what investors could learn from the experience.
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Coca-Cola’s 10-Year Stock Performance
Over the 10-year period ending June 19, 2026, Coca-Cola stock returned 146.9%, including reinvested dividends, according to Total Real Returns. That works out to an average annual return of 9.35%.
If you'd invested $1,000 in Coke 10 years ago, you’d have about $2,469 today. That means you would have more than doubled your money over the past decade.
The Dividend Factor
Coca-Cola offers investors the potential of capital appreciation. But it also pays a solid dividend and that can significantly increase total return. Coca-Cola is one of a handful of stocks known as “Dividend Aristocrats” that have raised their dividend for at least 25 years in a row. But Coca-Cola has done much more than that. The company has increased its dividend for an incredible 64 consecutive years.
If you reinvest your dividends into additional shares of stock, you start compounding your returns. Every time you increase your number of shares, you earn a larger dividend in the subsequent quarter, which allows you to buy even more shares. That’s the very definition of compounding returns.
It’s worth mentioning that while Coca-Cola’s dividend streak is impressive and the company will likely do all it can to continue its record, dividends are never guaranteed. Companies can and do cut dividends when business conditions warrant.
Coca-Cola vs. the S&P 500
Coca-Cola investors have more than doubled their money in a decade. That’s no small feat and many investors would be happy with that return. But the truth is that over the past 10 years, the S&P 500 index, which is a widely used proxy for the overall U.S. stock market, has trounced the returns of Coca-Cola stock.
Over the same period, the S&P 500 has returned over 310%, according to Total Real Returns. That’s well over double the return earned by Coca-Cola shares, even with dividends reinvested. If you had chosen the S&P 500 instead of Coke, your $1,000 investment would have grown to about $4,100.
The Takeaway
The lesson that both Coca-Cola and the S&P 500 are teaching is that two fundamental principles of investing work.
First, avoid timing the market. To reap the benefits of compound interest, you must remain invested. Trading in and out of stocks means you’re starting over from scratch every time in terms of compounding.
Next, reinvesting dividends, instead of spending them, can provide a significant boost to your long-term returns, also through the power of compounding.
The best part is that both activities are passive, meaning you can automate them and not have to worry about making choices over and over. Once you set up regular contributions to your investments and set your dividends to reinvest, all you have to do is monitor. This not only prevents you from “forgetting” to invest, but it also removes emotion from the equation.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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