Dividend investing has long been a favorite strategy for investors seeking both steady income and long-term growth. A well-chosen dividend stock not only provides regular cash payments but also offers the potential for capital appreciation over time.
Companies that consistently return profits to shareholders through dividends often have strong balance sheets, reliable cash flows, and a proven track record of weathering market cycles. For many, these traits make dividend stocks a cornerstone of a stable, resilient portfolio.
Unlike high-flying growth plays that can swing wildly with market sentiment, dividend stocks tend to reward patience. Reinvesting those regular payouts can supercharge compounding returns, allowing investors to grow their stake without adding new capital. Over years or decades, this disciplined approach can transform modest initial investments into substantial holdings, all while generating income along the way.
The most successful dividend investors look beyond just yield. They focus on companies with a history of increasing dividends, supported by durable business models and strong competitive advantages. From blue-chip industrials to leading consumer brands, these businesses often dominate their sectors, making them well-positioned to keep rewarding shareholders for years to come. Below are several dividend-paying companies that exemplify why this buy-and-hold strategy remains as relevant today as ever.
1. Chevron (CVX)
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Chevron stands out as a classic dividend stalwart, offering both income reliability and long-term payout growth. As of mid-2025, the stock yields around 4.4% to 4.5%, notably high relative to its historical average. With an expected dividend payout of $6.86 per share for 2025 and a streak of 38 consecutive years of dividend increases, Chevron ranks among the most dependable income-generating stocks available.
Strengthening its appeal, Chevron’s five-year dividend compound annual growth rate (CAGR) hovers around 6%, reinforcing consistent upward momentum in shareholder returns. Despite cyclical headwinds and recent softness in earnings, the company has remained committed to its dividend, returning nearly $6.9 billion to shareholders in Q1 2025 through payouts and buybacks, underscoring its confidence in long-term financial resilience.
2. Pepsi (PEP)
PepsiCo has earned its place as one of the most dependable dividend payers in the consumer staples sector, delivering steady income alongside durable brand strength. As of mid-2025, the stock offers a yield of roughly 3%, supported by an annual payout of $5.42 per share and an impressive streak of over 50 consecutive years of dividend increases, qualifying it as a true Dividend King. PepsiCo’s global portfolio, spanning beverages, snacks, and packaged foods, gives it a recession-resistant edge, making it an anchor holding for long-term investors.
Adding to its appeal, PepsiCo’s five-year dividend compound annual growth rate (CAGR) sits near 7%, reflecting management’s commitment to consistent income growth. Even in challenging macroeconomic environments, the company generates strong free cash flow, funding both shareholder returns and strategic investments in innovation and sustainability. With reliable earnings power and a proven history of rewarding shareholders, PepsiCo remains a buy-and-hold dividend stock that can serve as a cornerstone in any income-focused portfolio.
3. Coca-Cola (KO)
Coca-Cola is the embodiment of dividend reliability, offering both consistent income and long-term payout growth. As of mid-2025, the stock yields approximately 2.9%, with an annual payout of $2.04 per share, and an impressive streak of 53 consecutive years of dividend increases. This consistency places Coca-Cola among a select group of Dividend Kings that blend beloved brand strength with shareholder-centric capital allocation.
Over the past five years, Coca-Cola has delivered a steadier annual dividend growth rate of around 4.2%, with the most recent 12-month CAGR slightly stronger at 5.3%. Its payout ratio, in the range of 69% to 71%, underscores continued confidence in the sustainability of its cash flow and ability to reward shareholders. Combined with its global scale and recession-resistant business, Coca-Cola remains a compelling buy-and-hold choice for long-term income investors seeking both stability and growth.
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4. Procter & Gamble (PG)
Procter & Gamble stands as a cornerstone of dividend reliability, embodying both consistent income and long-term payout growth. As of mid-2025, the stock yields approximately 2.7% to 2.8%, with an annual payout of about $4.23 per share. Impressively, P&G has increased its dividend for 69 consecutive years, placing it among the most dependable and enduring income generators in the market.
What makes P&G exceptionally resilient is its consistent dividend growth, with a five-year compound annual growth rate (CAGR) of around 6%, and a healthy payout ratio near 62%, reflecting sustainable earnings coverage. Even amid global economic headwinds and restructuring efforts, P&G continues to return substantial capital to shareholders, handing back nearly $10 billion in dividends in 2025 alone, and planning similar levels of distribution in 2026. Its fortress-like brand portfolio and income stability make P&G a compelling buy-and-hold stock for long-term, income-minded investors.
5. Lowe’s (LOW)
Lowe’s offers a strong combination of dividend reliability and growth, making it a solid choice for long-term income investors. As of mid-2025, the stock yields about 2.0%, paying an annual dividend of $4.80 per share. Lowe’s boasts an impressive streak of over 53 consecutive years of dividend increases, placing it firmly in the rare company of Dividend Aristocrats.
What sets Lowe’s apart is its robust growth in payouts; its five-year dividend growth rate hovers around 15.9%, signaling a strong upward trajectory in shareholder returns. Despite economic ups and downs, Lowe’s continues to execute well, generating healthy free cash flow that supports both capital reinvestment and growing dividends. For income investors, Lowe’s represents a durable, steadily rising income stream anchored by operational strength and financial discipline.
Dividends: The 10-Year Wealth Engine
Long-term investors know that steady dividend payers can be the backbone of a portfolio. The strategy isn’t about chasing the hottest stock of the year, it’s about owning businesses that reliably return capital to shareholders while compounding in value over time. With consistent payouts, reinvested dividends, and a disciplined hold period, the impact on total returns over a decade can be substantial.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
