The 30-Year U.S. Treasury Bond Now Has a Higher Yield Than Ford and Coca-Cola. Is It Now the Best Asset for Passive Income?
2026-08-26 11:25
•Bram Berkowitz •The Motley Fool
••••••• ••••• Axe Cap view
When U.S. Bonds Out-Yield Ford and Coca-Cola, What Should SA Investors Do?
The 30-year U.S. Treasury now pays more than Ford and Coca-Cola dividends, forcing a rethink on income assets for rand investors.
The 30-year U.S. Treasury bond yield sitting at 5.23% is remarkable. It now beats the dividend yields of both Ford and Coca-Cola, two American stalwarts. For South African investors, this matters because the USD/ZAR rate is sensitive to U.S. yields. Higher U.S. yields often attract capital away from emerging markets, putting pressure on the rand. Coca-Cola, despite its lower yield, offers something the bonds don’t: an ironclad dividend history and strong brand resilience, which means steady earnings growth and a growing dividend is likely. Ford, on the other hand, feels riskier given its dividend cuts and uneven performance. Local fixed income looks less attractive if investors chase higher US yields; expect some volatility in rand assets like Naspers or FirstRand if the dollar keeps strengthening. I prefer watching Coca-Cola for long-term dividend income via offshore exposure, trimming Ford risk, and keeping an eye on USD/ZAR moves. This view depends on U.S. inflation and Fed policy sticking to their tight path—if inflation cools faster or geopolitical risks ease, bond yields could fall. this is just our opinion and not financial advice
Watch Coca-Cola closely for a cleaner dividend profile and consider reducing exposure to Ford-related assets or weak yield plays. Hedge exposure via USD/ZAR instruments if you suspect further U.S. yield strength.
- KO
- F
- USD/ZAR
- U.S. inflation surprises lower, reducing bond yields
- Rand strengthening unexpectedly, muting USD benchmark impact
6/10
The 30-year U.S. Treasury bond yield has surged to 5.23%, exceeding dividend yields from Ford and Coca-Cola, driven by elevated inflation, geopolitical tensions, and concerns over the $40 trillion national debt. While Treasury bonds are traditionally considered safe assets, rising yields signal growing investor concerns about government debt sustainability. The author recommends Coca-Cola over the 30-year bond due to its strong brand, earnings growth potential, and 64-year dividend history, but would consider the bond over Ford given Ford's weaker track record.
Our take is based on reporting first published by The Motley Fool.