Finding a good dividend involves more than just screening for high yields and long track records of annual payout raises. Many blue chip businesses would show up in that search, but only a few of these stocks will end up generating the type of market-thumping returns that income investors are reaching for.
That fact shines through when stacking up two Dow giants, Coca-Cola (NYSE:KO) and Home Depot (NYSE:HD). While the beverage titan has plenty of attractive investment qualities, Home Depot looks like the better dividend stock right now.
Sure, Coca-Cola pays a higher yield today, at over 3% compared with Home Depot’s 2%. But that gap is mainly due to investors’ judgments about the two companies diverging growth outlooks. Consumers are more focused on home improvements thanks to pandemic-related changes to shopping and work habits. These shifts have moved against Coke by severely