If dividend income is what you are looking for, several dependable dividend stocks can help generate passive income. But, in times of market uncertainty and inflationary periods, these companies may pause the dividends. This is where choosing the right stocks can make all the difference. When looking for dependable dividend stocks, look out for companies with steady cash flow generation who have been rewarding investors for years.
These companies believe in sharing rewards with investors and have managed to ensure steady dividend income and capital gains. These are industry stalwarts that may not have a super-high dividend yield but a strong history of rewarding investors for half a century. With that in mind, let’s consider the three dividend stocks to own.
Procter & Gamble (PG)
- Dividend yield – 2.41%
Known for owning some of the most popular household and personal care brands like Tide, Gillette, and Pampers, Procter & Gamble (NYSE:PG) has become a global household name. The brands have existed for years and have been used for generations, ensuring steady revenue flow for the company. PG stock is up 12% year-to-date, is on an upward rally, and is trading at the 52-week high of $167.
Despite inflation, P&G has managed to grow the business through price hikes. While the volume remained flat, earnings growth showcasing its pricing power occurred. In the third quarter, earnings per share increased 18% year-over-year, while revenue reached $20.2 billion. Organic sales growth was 3%, and net sales rose modestly by 1%.
The company has paid dividends for over 100 years and believes in rewarding shareholders. Procter & Gamble has kept investors happy for years with a robust free cash flow and profit growth. It has a dividend yield of 2.41% and has increased dividends for 68 consecutive years. The stock currently pays a quarterly dividend of $1.01 per share, a 7% increase YOY.
Considering the nature of its business, PG has ample growth opportunities globally. It is not just a passive income stock. The company offers capital growth and steady dividends for investors, making it one of the best dividend stocks.
Colgate Palmolive (CL)
- Dividend yield – 2.13%
Consumer goods companies survive market volatility due to the steady demand, no matter what. Owner of some of the most renowned brands like Colgate toothpaste, Speed Stick, and Ajax, Colgate-Palmolive (NYSE:CL) is another dividend aristocrat that could continue making investors happy for another decade. The company has earned consumer loyalty and sustained several economic downturns.
It has raised dividends annually for over 60 years and reported impressive numbers. The stock is up 16% YTD and 24% over the past 12 months, trading at $93 today. It enjoys a dividend yield of 2.13% and is very close to the 52-week high of $95.
It reported revenue of $5.07 billion and an EPS of 86 cents in the first quarter. The organic sales increased 9.8% while the EPS soared 84%. I think the sales growth might slow down in the coming years, but Colgate has enough liquidity to keep rewarding shareholders in the years to come. To keep up with the changing consumer preference towards organic and natural ingredients, the company is growing its Naturals range.
Colgate Palmolive has started the year on a high note, and its revenue growth shows that the company will remain relevant for another decade.
Coca-Cola (KO)
- Dividend yield – 3.04%
Beverage giant Coca-Cola (NYSE:KO) is a dividend aristocrat and a cash-heavy business that believes in rewarding investors. The company has shown resilience in times of high inflation and reported impressive numbers over the past two quarters. It has nailed the business by licensing the concentrate, which ensures that Coca-Cola is available globally across several countries.
This also saves a significant amount of cost for the company. In the recent quarter, it reported a revenue of $11.3 billion, achieving an 11% YOY organic growth while the EPS jumped 7% to $0.72. The management is aiming for organic revenue growth from 8% to 9%.
Coca-Cola offers a wide range of products and has moved towards healthy drinks to remain relevant with changing consumer preferences. This has helped boost its business in recent years. Coca-Cola has a record of raising dividends for over 60 consecutive years, which makes it one of the top dependable dividend stocks for long-term investors. The stock has mostly remained flat but is up 6% YTD and moving closer to its 52-week high, trading at $63. If the current rally continues, the stock could hit a new high very soon. Warren Buffett’s favorite stock, Coca-Cola, brings stability and reliability to your portfolio. The stock looks reasonably valued and could see further upside from here.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.