Generating passive income by buying and holding dividend stocks is one of the most reliable ways to build wealth over the long term. The best dividend stocks offer high and safe yields, have paid dividends consistently for years, and have strong underlying financials. Let’s take a look at three stocks that meet this criterion to see which would fit best in your portfolio.

PepsiCo

PepsiCo (NYSE: PEP) is one of the world’s largest food and beverage companies with its products being consumed over one billion times per day around the world. Its family of brands includes Lay’s, Doritos, Cheetos, Quaker, Pepsi-Cola, Gatorade, and Mountain Dew. The company also just announced the acquisition of Poppi, a popular prebiotic soda brand, for $1.95 billion earlier this morning.

PepsiCo currently pays a quarterly dividend of $1.4225 per share, which amounts to an annualized dividend of $5.69 per share and gives its stock a yield of approximately 3.8% at the time of this writing. As a “dividend king,” PepsiCo has raised its annual dividend for over 50 consecutive years. Its 5% increase last month, which is effective for its June payment, marks its 53rd consecutive annual dividend increase, making it one of the most reliable dividend-growth stocks in the consumer staples industry.

Exxon Mobil

Exxon Mobil (NYSE: XOM) is one of the world’s largest energy companies with operations spanning the exploration, production, and refining of oil and natural gas, the manufacturing and marketing of fuels, lubricants, and chemicals, and the sale of products under its Exxon, Esso, and Mobil brands.

Exxon Mobil currently pays a quarterly dividend of $0.99 per share, equating to an annualized dividend of $3.96 per share and giving its stock a yield of approximately 3.5% at the time of this writing. While not yet a “dividend king” like PepsiCo, Exxon has increased its annual dividend for 42 consecutive years, securing its place as a “dividend aristocrat,” which is a stock that has raised its dividend for 25 consecutive years or more.

Simon Property Group

Simon Property Group (NYSE: SPG) is one of the world’s largest owners and managers of premier shopping, dining, entertainment and mixed-use properties. As of December 30, 2024, the company owned or had ownership interests in 229 properties totaling 183 million square feet across North America, Europe, and Asia. It also holds an 88% ownership interest in The Taubman Realty Group, which owns 22 malls in the U.S. and Asia, and a 22.4% ownership interest in Klépierre, which owns 70 malls across Europe.

Simon Property currently pays a quarterly dividend of $2.10 per share, which amounts to an annualized dividend of $8.40 per share and gives its stock a yield of approximately 5.1% at the time of this writing. While it is neither a “dividend king” nor “dividend aristocrat,” it has been growing its dividend rapidly in recent years. Simon Property has raised its dividend a dozen times since the start of 2021, with its latest being a 2.4% increase in November.

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