Dividend stocks may not make for the most exciting investments to put into your portfolio, but if you pick the right ones, they can be among the most reliable. Quality dividend stocks can generate cash for you on an ongoing basis -- for years, or potentially decades. And by focusing on dividend growth stocks, your dividend income is also likely to rise over the years.
Three high-yielding stocks that all income investors should consider buying right now are Coca-Cola (KO 0.01%), Verizon Communications (VZ +0.27%), and ExxonMobil (XOM 1.37%). Together, they can help diversify your portfolio while enabling you to generate much more cash than if you were to just go with the average S&P 500 stock, which pays a paltry 1.1%. Plus, they have all established themselves as being solid dividend growth stocks with terrific track records.
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Coca-Cola
Soft drink giant Coca-Cola has a simple yet unstoppable business. It has proven its resiliency over the years. People buy its beverages during both good times and bad, when there are shutdowns and even when it raises prices due to inflation. That's not just brand loyalty, but also pricing power.
This is the kind of business that can be rock-solid to invest in for the long haul. Coca-Cola's top line has grown modestly in recent years but even that's been enough to ensure its dividend continues rising. From 2021 to 2024, Coca-Cola's revenue rose by 22% to $47.1 billion, and its net income increased by just under 9%, to $10.6 billion. That's not earth-shattering growth over a period of three years, but it's that slow-and-steady performance that makes Coca-Cola one of the safest stocks to hang on to.
NYSE: KO
Key Data Points
The Dividend King has raised its dividend for 63 straight years, and there's little doubt those increases will continue. Its payout ratio is just 67% of earnings, leaving plenty of room there for the company's dividend to rise higher. The stock currently yields around 3%.
Verizon Communications
Telecom companies are among the safest dividend stocks to own for their stability. Even if Verizon consumers are not rushing out to buy new cellphones due to concerning economic conditions, they still need ongoing access to the company's wireless and broadband services. That creates recurring income, which arguably makes Verizon an even safer investment to hold on to than Coca-Cola.
Over the past four years, the company's revenue has been fairly predictable, falling within a range of $133 billion and $137 billion over that stretch. It definitely doesn't scream growth, but for income investors, the lack of surprises is what makes the stock a good buy. As a leading telecom provider in the country, Verizon isn't going anywhere.
NYSE: VZ
Key Data Points
Even if you're underwhelmed with Verizon's single-digit growth, that doesn't detract from its ability to be a great dividend stock. It yields an incredible 7%, which makes it easily the highest-yielding stock on this list. In September, the company also raised its dividend for a 19th consecutive year. Meanwhile, its payout ratio is below 60%, making this another example of a solid income-generating stock you can put in your portfolio and forget about.
ExxonMobil
Rounding out this list is oil and gas giant ExxonMobil. There's going to be some volatility with the company's earnings due to its exposure to commodity prices, but as a leader in its industry, it's one of the best-positioned dividend stocks you can own.
The best testament of Exxon's safety is its dividend growth -- the company has increased its dividend for 43 straight years. That covers periods of inflation and economic instability, and through it all, ExxonMobil has remained a reliable dividend growth stock to own. It serves as a valuable reminder that this can be a solid stock to hold in your portfolio as it can also be a possible hedge against inflation. In 2022, when the stock market was crashing due to rising inflation, ExxonMobil's stock rose by an incredible 80%, while the S&P 500 declined by more than 19%.
NYSE: XOM
Key Data Points
By no means will that always be the case, but with strong financials, Exxon is yet another incredibly safe income-producing stock to hang on to. Although its earnings per share totaled $1.76 and was down 8% in the most recent quarter (which ended on Sept. 30), that's still solid coverage for the company's quarterly dividend of $0.99, which yields 3.5%.
