Big Blue Vs. Coke: Which Is A Better Long-Term Investment?

Coca-Cola (KO) and International Business Machines (IBM) are both highly profitable businesses with a long history of success. Coca-Cola was founded in 1892. IBM was founded in 1911. Finding businesses that have survived the creative destruction of capitalism for over 100 years is rare. Finding businesses that have not only survived but thrived is even rarer still. These businesses have built powerful brands over the last century that are recognizable by most Americans. IBM is ranked the 10th most valuable brand in 2014. Coca-Cola ranks as the 12th most valuable brand in 2014.

Conclusion: Coca-Cola outranks IBM based on the 8 Rules of Dividend Investing, but not by much. Both of these businesses are excellent additions to the portfolio of the long-term dividend minded investor. Shareholders of Coca-Cola can expect to earn a CAGR of around 7.5% to 8.5% through dividends (3%), share repurchases, (1.5%), and growth (3% to 4%). Shareholders of IBM can expect to earn a CAGR of around 8% through dividends (2%), share repurchase (6%).

Source: Seeking Alpha

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