1 Defensive Dividend Stock to Buy With Plenty of Fizz in a Volatile Market

TradingKey - If you’re feeling uneasy about the recent market turbulence, you’re not alone. Wall Street markets have cratered and are now currently in correction territory. Uncertainty is running high and it’s easy to see this selling getting worse before it gets better. 

Inflation concerns, trade war rhetoric, and volatile earnings reports are making it tough for investors to stay the course.

But here’s the good news: some stocks can actually thrive in any maket environment. And one of the best defensive plays out there is Coca-Cola Co (NYSE: KO) – a true Dividend King that has increased its dividend payout for 63 consecutive years.

Even with all the chaos in the market, Coca-Cola has managed an 11.8% year-to-date gain; showing remarkable resilience when other stocks are tumbling. 

And it’s not just about share price stability. With a 2.9% dividend yield and a 10-year compound annual dividend growth rate (CAGR) of 4.8%, Coca-Cola offers investors a reliable stream of income that keeps growing over time. 

Here’s why investors should consider adding some fizz from Coke to their portfolio when markets are flatlining.

Why is Coke a defensive powerhouse?

Investing in a consumer staple stock like Coca-Cola is a classic strategy during uncertain times. Why? Because people drink Coke whether the economy is booming or struggling. It doesn’t matter if interest rates are high or if trade war fears are rattling the markets – Coca-Cola’s products remain in demand.

It’s also one of the big reasons cited by investing guru Warren Buffett for why he has held on to Coke shares for decades.

That reliability is reflected in the company’s gross profit margin of over 60%, highlighting that it maintains pricing power even in inflationary periods. And with 138 years of history, Coca-Cola isn’t just surviving, it’s also thriving.

Still a growth story, even after a century

Despite being one of the most recognised brands in the world, Coca-Cola still sees plenty of room for expansion. 

At the recent Consumer Analyst Group of New York (CAGNY) 2025 conference, CEO James Quincey highlighted a key fact: Coke only holds 14% market share in developed markets and just 32% market share in emerging markets.

Translation? There’s still a long runway for growth for this beverages company. Coke is aggressively expanding its portfolio of billion-dollar brands, investing in premium products like Fairlife milk (which skyrocketed from $10 million in 2014 to nearly $4 billion today). 

It’s also leveraging AI-driven marketing to target consumers more effectively while keeping advertising costs in check.

Dividend King that keeps paying you more

For dividend investors, Coca-Cola is the kind of stock you love to own. It’s not just the 2.9% yield that makes it attractive but also the reliability of its dividend growth.

In the US, Dividend Aristocrats are companies that have grown their dividends for at least 25 consecutive years. However, within that group is a more prestigious sub-set of dividend payers known as Dividend Kings; these are companies that have paid out rising dividends for 50 consecutive years or longer. 

Thankfully, Coke is part of this group. The company has increased its dividend every single year for the past 63 years and it boasts a 10-year dividend CAGR of 4.8%, well above the rate of inflation in most developed countries worldwide. 

Furthermore, the company has little trouble generating strong cash flows to keep funding future hikes and, as a Dividend King, the company’s management ensures that raising shareholder dividends consistently is one of their top capital allocation priorities.

That’s what makes Coca-Cola an ideal “buy and hold” dividend stock. Whether the market is climbing or crashing, Coca-Cola keeps paying you more each year.

Bottom line for investors amid fear

Right now, market volatility is shaking up portfolios, and investors are scrambling for safety. If you’re looking for a stock that offers stability, reliable dividends, and long-term growth potential, Coca-Cola is a no-brainer. 

It’s a defensive giant with a rock-solid business, a resilient dividend, and plenty of expansion opportunities ahead. 

When the market is unpredictable, it pays to own a company that thrives no matter what. So, while everyone else is panicking, you can sit back, collect your Coca-Cola dividends, and enjoy the ride.