Starbucks and Coca-Cola both have a 2.9% dividend yield, paying $0.41 per share in dividends. However, Coca-Cola shines as an income investment due to three key fundamentals. Coca-Cola has a lower payout ratio at 67.7% compared to Starbucks’ 103.9%. Coca-Cola also has a higher operating margin of 32.2%, compared to Starbucks’ 9.51%. Additionally, Coca-Cola has a share buyback program in place, retiring 1.1 million shares last quarter. This makes Coca-Cola a better bet for income investors in the long run.

While both companies started 2020 with the same dividend, Coca-Cola has outperformed Starbucks in terms of dividend growth and sustainability. Coca-Cola has shown consistent growth in earnings and has a more sustainable payout ratio and higher operating margin. The company also has a share buyback program in place to reduce the number of shares outstanding. These factors make Coca-Cola a more attractive investment for income investors compared to Starbucks.

Read more at Nasdaq: Which Is a Better Income Stock — Coca-Cola or Starbucks?