Key Takeaways
- Dividend stocks offer a way to earn more than just a nominal interest rate on savings and hopefully see much of their share price return even more than savings bonds.
- The five best dividend stocks of all time have a long history of paying dividends and increasing them year after year.
- Coca-Cola, Johnson & Johnson, and Procter & Gamble are blue-chip companies that are as much a part of America's financial backbone as any tributary of the Mississippi is to the nation’s physical geography.
- ExxonMobil and Colgate-Palmolive are other stalwarts that balance relatively high dividends with a sector and industry presence that suggests some resilience.
Introduction
Have you ever seen a rollercoaster and thought, "Yep, that's my portfolio on a bad day"? You're not the only one. Countless investors go after growth stocks that put on a good show but, when the market tumbles, leave shareholders hanging on for dear life.
What if there was a way to earn a steady income—even while you sleep—without this gut-churning volatility? If you want to bet on cash-generating giants that have paid their shareholders through good times and bad, here's the list for you.
I've chosen the five best dividend stocks of all time to explore. We will discover why they belong in your portfolio.
What are dividend stocks?
Dividend stocks are shares in companies that regularly distribute a portion of their profits to shareholders, usually quarterly. The cash reward they provide sets dividend stocks apart from other stocks, such as growth stocks (which reinvest profits back into the business).
Owning dividend stocks makes you the kind of business partner who receives checks without having to sell or do anything beyond simply existing as a company owner.
Picture owning a rental property, yet rather than having tenants, you have corporations such as Coca-Cola or Johnson & Johnson that send you checks every three months. That is the enchantment of dividend stocks. They are the rental properties of the stock world.
The companies that pay dividends share their profits with shareholders like faithful partners. But here's the kicker: Not all dividend stocks are created equal. The real gems are the Dividend Kings—companies that have raised their payouts for 50+ years straight.
They are the Warren Buffetts of the corporate world: wise, patient, and built to last.
List of the best dividend stocks of all time
Here’s your VIP list of dividend royalty, chosen for their track records, resilience, and ability to fatten your wallet:
1. Coca-Cola (KO) – Best for Brand Power
2. Johnson & Johnson (JNJ) – Best for Healthcare Stability
3. Procter & Gamble (PG) – Best for Everyday Essentials
4. Colgate-Palmolive (CL) – Best for Global Reach
5. ExxonMobil (XOM) – Best for Energy Sector Dividends
Introducing the criteria for selecting the best dividend stocks
I used five non-negotiable criteria:
- Dividend Streak: 25+ years of payout increases (dividend aristocrats/kings).
- Payout Ratio: Below 75% of earnings (sustainable!).
- Sector Dominance: Unshakable market position (think household names).
- Dividend Growth: Annual increases beating inflation.
- Crisis Performance: Survived 2008, 2020, and more.
The 5 Best dividend stocks of all time
I have examined years of data in search of stocks that offer sector dominance, payout safety, and resilience. These are not meme stocks; instead, the titans of their respective sectors are blue-chip stocks that could serve as the basis for a precision-engineered, long-term investment portfolio.
1. The Coca-Cola Company (KO) – Best for brand power
Coca-Cola is more than just a drink; it's a universal rite. From its core U.S. market to everywhere else globally, KO's flagship product is consumed with the fervor that most companies only dream of. Whether at a backyard BBQ or a movie theater, people enjoy drinking it everywhere and at any time.
With over 60 years of increasing dividends, any satisfactory discussion of KO must revolve around its diversification; think Dasani (water), Costa (coffee), Bodyarmor (sports drink), and so forth.
What the numbers show:
- Dividend Yield: 3.13%
- Payout Ratio: 78.3% (Earnings are well above the level needed to cover the dividends paid; there is no danger of cutting payments here).
- Crisis Tested: Made it through the challenges of 2008 and the 2020 COVID-19 pandemic, as well as the rise of seltzer water.
But wait: Health trends might impair soda sales. Nevertheless, KO is moving faster in turning things around, with 25% of its revenue now coming from drinks with little sugar.
Ideal For: Investors longing for a brand as eternal as "Happy Birthday."
2. Johnson & Johnson (JNJ) – Best for healthcare stability
JNJ is a diversified healthcare behemoth. Looking for a Band-Aid? You'll find it under the JNJ umbrella. Need a next-gen cancer drug? JNJ has your prescription.
Hip replacements? Sure, JNJ does that, too—among many other things. This diversification means when one sector sneezes, another hands it a tissue. Of course, the key to JNJ’s stability is what they do (plenty) and how well they do it (generally, very).
What the Figures Show:
- Dividend Yield: 3.38%.
- Continuity: 62 impressive years of rises.
- Moat: Over 108,000 patents globally and a research and development budget of $15 billion in 2023.
But wait: Lawsuits (talcum powder, opioids) can cause short-term jitters. Yet, JNJ’s revenue of over $85 billion (2023) acts like a financial shock absorber.
Ideal for: Investors who desire dependable portfolios as reliable as flu shots.
3. Procter & Gamble (PG) – Best for Everyday Essentials
You will purchase Procter & Gamble products even if the economy is crashing. Tide detergent? A non-negotiable product. Pampers? Kids don’t wait for bull markets. With 67 years of steady dividend growth, P&G is the tortoise of this race, consistently winning and never losing.
What the Figures Show:
- Yield on dividends: 2.45%
- Worldwide penetration: 180 countries and growing
- Brand equity: 65 brands, each with sales exceeding 1 billion dollars (2015). Brands include everything from Gillette to Gain.
But wait: Growth is slow as a dial-up connection in developed markets. But in emerging economies? PG's growth is faster than the return of a well-served tennis ball.
Ideal for: Investors who prefer a bare-bones portfolio.
4. Colgate-Palmolive (CL) – Best for global reach
Colgate dominates 40% of the global toothpaste market. Let that sink in. Every time someone brushes their teeth, there’s a 1-in-2.5 chance they’re using CL. With 60+ years of dividend hikes, this company’s growth is rooted in something simple: People everywhere have teeth that they clean twice daily.
What the Figures Show
- Yield on Dividends: 2.28%
- New International Markets: 24% of sales are from Asia and /or Latin America, —where the middle class is absolutely thriving.
- Growing Profits with Growing Margins: Although the profits reported last year would suggest otherwise, the company is actually operating more efficiently than ever.
But wait: Competition is intense (Crest, I’m looking at you). Nonetheless, CL enjoys brand loyalty stickier than peanut butter.
Ideal for: Investors wagering on the ascent of worldwide sanitation practices.
5. ExxonMobil (XOM) – Best For energy sector dividends
“Oil is dead,” they say. Yet, Exxon has paid dividends for 140 years and counting. When oil prices surge, XOM thrives. But here’s the twist: They’re quietly investing in biofuels and carbon capture, making a bet on the future that looks like something a poker pro might pull.
What the Figures Say
- Dividend Yield: Roughly 3.5%.
- Grit: Put it to the test during oil’s “nobody wants it” cycles.
- Liquidity: $30 billion in cash to ride out the next storm.
But wait: Earnings fluctuate with oil prices—volatility is essential to the package.
Ideal for: Investors seeking abundant returns who can manage a bit of bumpy riding.
Frequently asked questions
Q: How much of my portfolio should be dividend stocks?
A: 20-30% is the sweet spot for most. Think of them as the foundation—your portfolio’s concrete slab.
Q: Can dividends get cut?
A: Technically, yes, but my picks have survived multiple apocalypses. They’re the cockroaches of finance (in a good way).
Q: What’s a “safe” dividend yield?
A: 2-4%. Anything over 6% is like a too-good-to-be-true Tinder date—proceed with caution.
Building wealth isn’t about timing the market or betting on crypto memes. It’s about owning businesses that pay you reliably, decade after decade. These five Dividend Kings are more than stocks—they’re heirlooms.
Start small, reinvest religiously, and let time transform those quarterly drips into a river of cash. After all, why ride a rollercoaster when you can cruise on a dividend-powered yacht?
Conclusion
While technology stocks move up and down like hyper squirrels, these five stocks are the ones you can count on. They are the “Forever Stocks” —companies whose presence is so pervasive that they never go away.
Reinvesting their dividends via DRIPs (Dividend Reinvestment Plans) ensures they will compound into something massive over the decades—if the status quo continues.
Pro Tip: Weigh these against growth stocks (for instance, 70% dividends and 30% growth). It’s like you have a job with reliable income and a part-time gig.
