Ever since I started my investment journey, dividend stocks have remained a favorite, and for good reason. I enjoy the steady passive income and reinvest the dividends to keep the money growing. With hundreds of dividend-paying companies in the industry, it is possible to choose high-yield stocks that have a steady record of rewarding shareholders and an ability to sustain dividends, even in tough times.
The stock market has shown volatility since the start of the year amid recession concerns and tariff uncertainty. I continue to choose stocks that provide safety and passive income. I’ve invested in these dividend stocks for 15 years and they have become a core part of my passive income plan. These companies can not only sustain the dividends but also increase them in the coming years. Here are my top picks.
Johnson & Johnson
A dividend portfolio remains incomplete without Johnson & Johnson (NYSE: JNJ | JNJ Price Prediction). One of the top healthcare stocks, the company is an exceptional brand with a global presence and a unique product line.
The company has a lineup of medicines across different areas including oncology, neuroscience, and immunology. It holds more than 10 drugs which generate about $1 billion in sales each year. In the first quarter, the company saw a 2.4% jump in sales to $21.9 billion and it has increased the full-year sales guidance. Its EPS stood at $4.54 and the majority of the sales were driven by the innovative medicine segment.
Additionally, the company has an impressive pipeline of drugs which means the company will keep growing even if the revenue increases at a slower pace. It also has the pricing power to handle negotiations with the U.S. Centers for Medicare and Medicaid Services (CMS).
The company has increased dividends for 63 consecutive years and currently has a yield of approximately 3.1%. Johnson & Johnson has been around for over a century and it has seen it all. The healthcare leader is known as a Dividend King for a reason.
3M
Another top pick, 3M (NYSE:MMM) is a highly diversified business and provides services in multiple industries. The company has four segments, namely, transportation, healthcare, safety, and industrial and consumer.
The company achieved an organic sales growth of 1.5% and an EPS of $1.88, up 10% year over year in the first quarter. It reported slower growth but the management is expecting better earnings in the coming quarters. 3M is focusing on operational improvements to turn around the business.
Trading for $149, the stock is up 15% year-to-date and 51% in 12 months. Despite the weak sales environment and ongoing market volatility, 3M hasn’t disappointed investors. CEO Bill Brown has laid out several initiatives to turn the business around. He is focusing on revitalizing new product introductions, which could improve sales growth and margins.
MMM enjoys a dividend yield of 1.97% and has increased dividends for 65 years. While the short-term outlook may not look attractive, 3M is for long-term investors and its dividends are worth watching out for.
There is no doubt that the industry is operating in an environment that is highly volatile right now. However, if the economic outlook improves through the de-escalation of the trade conflict, 3M has the potential to see higher sales and revenue.
Coca Cola
The top beverage giant is a favorite of Warren Buffett and he holds over 400 million shares in the company. Coke (NYSE: KO) is a highly diversified business with the most valuable brands including Sprite, Minute Maid, Fanta, and Diet Coke.
In the first quarter, Coca-Cola reported sales of $11.22 billion and an EPS of 73 cents. Despite a 2% drop in net sales, the company saw a 6% rise in organic revenue. The management has maintained the full-year forecast and expects the tariff disruptions to be manageable. Despite the tariffs, it is a well-shielded company that will keep paying you each quarter.
The company has raised dividends for over six decades and enjoys a yield of 2.84%. It announced a 5.2% year-over-year rise in the quarterly per-share payout and the company has the ability to afford to keep paying dividends. KO stock is exchanging hands for $71 and is up 16% year-to-date. This is a solid dividend stock to buy under $100.
The name, reliability, and the global presence make Coca-Cola a top dividend king to own. I have held Coca-Cola for over 15 years and I am nowhere near giving up on it.
Procter & Gamble
One of the largest consumer products companies, Procter & Gamble Co. (NYSE: PG) has become a household name today. It is a leader in healthcare, beauty and grooming, and baby and family care. The company owns some of the biggest brands including Pampers, Gillette, Tide, Olay, and Pantene. Since it doesn’t rely on a particular country, brand, or category, it has a heavily diversified business that will keep generating revenue. It is in a better position to handle tariff-related issues and inflationary pressure.
In the recently announced results, the company reported a 2% rise in net sales and a 3% jump in organic revenue. Its EPS came in at $1.88 and the management has reiterated the full-year outlook.
Exchanging hands for $167, PG stock is flat year-to-date and up 2.8% in 12 months. The stock is far from cheap, it has a P/E ratio of 26.64, higher than its 10-year median of 25.7 but paying a premium for the stock might be worthwhile in an uncertain environment like today.
The company has a dividend yield of 2.52% and it has increased dividends for 69 consecutive years. If you want to play super-safe, this is the Dividend king to own.
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