Coca-Cola Stock Is Interesting, but Here's What I'd Buy Instead

Investors are gravitating toward proven winners like Coca-Cola amid market uncertainty. With 64 consecutive years of increasing its dividend and a 2.6% yield, Coca-Cola (KO +0.21%) is one of the most reliable ways to participate in the stock market while collecting passive income. But Coke's dividend has played a supporting role in recent years. The real star of the show has been its soaring stock price. Coke jumped 12.3% in 2025 and is already up 14.2% year to date -- crushing the S&P 500's (^GSPC +0.77%) 0.9% return. Coke remains one of the most intriguing dividend stocks to buy now. But I think Campbell's (CPB +0.68%) is a far better buy. Here's why. Image source: Getty Images. Campbell's is more than just a soup company Campbell's is known for its flagship soup label, but it also owns several meal and snack brands, from Prego, Rao's Homemade, Pace, and V8 to Goldfish, Lance, Snyder's of Hanover, Pepperidge Farm, Cape Cod, and Kettle. The company has been diversifying its revenue stream by relying less on salty meals and snacks, with brands and product versions specially catered to health-conscious consumers. ExpandNASDAQ: CPBCampbell'sToday's Change(0.68%) $0.18Current Price$27.30Key Data PointsMarket Cap$8.1BDay's Range$26.95 - $27.6952wk Range$25.62 - $43.85Volume207KAvg Vol7MGross Margin29.84%Dividend Yield5.72% Coke faces the same challenge, given its heavy reliance on Coca-Cola and other sodas. In 2025, 69% of Coke's worldwide case volume was soft drinks. Meanwhile, its trademark cola accounted for 42% of U.S. unit case volume and 48% of non-U.S. unit case volume. Lower-calorie and sugar-free versions of Coke continue to perform well, but the company is still heavily reliant on one brand, leaving it vulnerable to changing consumer preferences. Still, Coke's results speak for themselves, as the company has done a masterful job of maintaining organic growth and ultra-high margins thanks to its elite supply chain, distributed bottling network, and unmatched global brand recognition. ExpandNYSE: KOCoca-ColaToday's Change(0.21%) $0.17Current Price$80.73Key Data PointsMarket Cap$347BDay's Range$79.86 - $81.0952wk Range$65.35 - $81.09Volume788KAvg Vol18MGross Margin61.75%Dividend Yield2.53% A better value with a higher yield Coca-Cola deserves a premium valuation, but Campbell's is simply too deep in the bargain bin to ignore. Campbell's fetches a mere 11.1 forward price-to-earnings ratio compared to 24.7 for Coke. CPB PE Ratio (10y Median) data by YCharts Unlike Coke, Campbell's has struggled to pass along costs to consumers. But it is still generating ample free cash flow and earnings to cover its dividend. In fact, Campbell's has a similar payout ratio to Coke and better free-cash-flow conversion over the trailing 12 months. CPB Free Cash Flow Per Share data by YCharts Campbell's doesn't have Coke's elite track record of boosting its payout, but it has maintained or raised its dividend every year since 2002. And it yields 5.8% -- which is substantially more than Coke. Campbell's is the better income stock Coke remains an ultra-reliable dividend stock, but the stock price has increased at a far faster rate in recent years than its earnings, which has inflated its valuation. By comparison, Campbell's is deeply discounted even though its dividend expense is manageable. All told, Campbell's is the better buy for income investors looking to give their passive income stream a jolt.Read NextDec 13, 2025 •By Daniel FoelberDown 32% With a 5.5% Yield, Is This High-Yield Dividend Stock Too Cheap to Ignore, and Worth Buying in December?Mar 5, 2025 •By Motley Fool Markets TeamCampbell's Q2 Earnings Mixed; Guidance DropsJan 11, 2024 •By Reuben Gregg BrewerCampbell's Thanksgiving Performance Changed in An Important Way for the Food Maker and the EconomyJan 7, 2024 •By Jon QuastSurprise: 42% of Campbell's Profits Come From Something That Has Nothing to Do With SoupJun 9, 2023 •By Demitri KalogeropoulosWhy Campbell Soup Stock Dropped This WeekJun 7, 2023 •By Jon QuastWhy Campbell Soup Stock Dropped TodayAbout the AuthorDaniel Foelber is a contributing Motley Fool stock market analyst with extensive experience covering the broader stock market and publicly traded companies across energy, industrials, utilities, materials, technology, communications, consumer discretionary, consumer staples, and financial stocks. Daniel looks for industry leaders offering compelling growth, value, or dividends to generate passive income. He has also written for energy trade publications and helped build oil and gas training modules. He holds a bachelor’s degree in finance and a certificate in personal financial planning from the University of Houston. He believes the best investors are those who focus on fundamentals, remain steady through volatility, and filter out market noise.TMFpalomino2Stocks MentionedCampbell'sNASDAQ: CPB$27.30 (+0.68%) $+0.18S&P 500 IndexSNPINDEX: ^GSPC$6890.07 (+0.77%) $+52.32Coca-ColaNYSE: KO$80.73 (+0.21%) $+0.17*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.