Investors looking for the best dividend stocks and quality stocks to buy now may want to pay close attention to Morgan Stanley’s latest recommendations. As market volatility continues and economic uncertainty lingers, the Wall Street firm says companies with strong cash flow, healthy balance sheets, consistent earnings, and reliable dividends are well-positioned to outperform over the long run. 

One of those stocks is Coca-Cola (NYSE: KO), one of Morgan Stanley’s favorite stocks. 

The company recently reported better-than-expected earnings. It also raised its outlook for the rest of the year. EPS of 97 cents beat by four cents. Revenue of $13.4 billion, up 7.2% year over year, beat by $230 million. It also raised its full-year guidance, now expecting revenue to grow by 5% as compared to earlier calls for growth of 4% to 5%. Earnings are expected to grow in a range of 9% to 10%, which is above prior estimates of 8% to 9%.

Even better, Coca-Cola pays a dividend with a yield of about 2.4%.

Plus, analysts are even more bullish. Bank of America said Coca-Cola delivered strong results and raised its outlook, which should be well received by investors. Analyst Peter Galbo said the company “cleared a high bar” despite already-high expectations and reinforced confidence in its long-term growth strategy. The firm maintains a Buy rating with a $95 price target.

TD Cowen called the earnings report a high-quality result. The firm reiterated its Buy rating and $90 price target.

Jefferies pointed to another quarter of better-than-expected results and higher guidance, along with strong organic revenue growth driven by volume, improving returns on invested capital (ROIC), and the potential for a favorable IRS tax outcome that could boost free cash flow. Jefferies maintained its Buy rating and raised its price target to $95.

Sincerely,

Ian Cooper