3 Dividend Kings You Should Add to Your Portfolio for Lifelong Passive Income

If you’re looking to grow your dividend income, you almost can’t go wrong with Dividend Kings. These are stocks that have increased their dividends for at least 50 consecutive years. It goes without saying that a company with such an impressive dividend record must have solid financials and growth prospects, otherwise it wouldn’t be able to sustain dividend growth over several decades.

Coca-Cola (NYSE:KO), Philip Morris (NYSE:PM)AND Real estate income (NYSE:O) There are three Dividend Kings to buy right now, according to these fool.com contributors. Here’s why.

Resilient consumer brand

John Ballard (Coca-Cola): Coca-Cola is a dominant global beverage brand that has paid rising dividends for 62 consecutive years. Shares are up 21% year to date after strong financial results in the first half of 2024.

Consumers cut back on spending, but the beverage industry remained resilient. Coca-Cola reported a 2% year-over-year increase in unit volume in the latest quarter, while also achieving double-digit organic revenue growth and higher margins.

Coca-Cola has a diverse portfolio of brands, including teas, juices and carbonated drinks. Across all of these brands, it generates a healthy operating profit margin of 21%, which management is looking to improve by re-franchising its bottling operations. The profitable mix gives the company a variety of selling opportunities for a variety of occasions, while generating healthy profits that allow it to pay growing dividends.

The company pays out about 75% of its annual earnings in dividends. The quarterly dividend is currently $0.485 per share, up 21% over the past five years. This gives it a forward dividend yield of an attractive 2.71%, compared with just 1.32% in S&P500.

The stock’s performance reflects the brand’s strength and potential for continued growth over the long term. Coca-Cola’s fastest-growing markets in the second quarter were Latin America and Asia Pacific. The stock’s above-average returns offer investors great value with growth ahead.

This long-time dividend payer is still heating up

Jeremy Bowman (Philip Morris): Philip Morris may seem like an odd choice for a long-term dividend stock.

After all, everyone knows smoking is on the decline, but Philip Morris is now doing much more than just cigarettes. The company has successfully diversified into next-generation products, including heated, non-flammable IQOS pods, which work like vaporizers but use tobacco instead of e-liquid, and Zyn nicotine pouches, which it acquired in 2022 with the acquisition of Swedish Match.

Thanks in large part to the success of these two products, the tobacco stock now generates about 40% of revenue from new-generation, smokeless products, and because these products generate even higher margins than cigarettes, they now generate more than 40% of Philip Morris’s gross profit. Demand for Zyn has been so strong that the company recently announced new investments to expand production capacity in Colorado and Kentucky.

Because Philip Morris sells cigarettes only in international markets, the company continues to grow its cigarette category, as organic revenue from combustibles, which is primarily cigarettes, grew 4.8% last quarter. Even cigarette shipments rose 0.4% this quarter.

Total organic revenue rose 9.6% to $9.5 billion in the quarter, and organic operating income rose 12.5%, a great result for a dividend stock that appears to be maturing.

Philip Morris also just raised its quarterly payout by 3.8% to $1.35. While the company isn’t technically the Dividend King, given its history as part of Altria, it has raised its dividend for the past 55 years.

The company currently offers a dividend yield of 4.4% and everything indicates that it will be increased in the coming years.

Monthly high yield dividends

Jennifer Saibil (real estate income): There are few dividend stocks on the market that can match Realty Income. It has everything a passive investor could want in a stock: the dividend is high-yielding, reliable, growing, and the company pays it monthly, which is a bonus.

Realty Income is a retail real estate investment trust (REIT), meaning it leases properties to retailers. However, it has grown significantly over the past few years and is well-diversified across industries. Retail real estate still accounts for 79.4%, and within retail, it serves core categories like grocery stores, convenience stores, and dollar stores, giving it resilience in times of pressure like pandemics and inflation. Combined, these categories make up more than 26% of its total portfolio.

Thanks to two recent acquisitions, as well as the purchase of new properties, the number of properties has more than doubled in the past few years to 15,450. It has entered gaming and industrials, which together account for almost 18% of the portfolio and provide the diversification needed to balance the risk of concentration in one area.

REITs pay out most of their earnings in dividends, so they tend to be excellent dividend stocks. Realty Income has been paying a dividend for over 50 years and has raised it for 108 consecutive quarters. At its current price, it yields almost 5%, which is higher than the average of about 4% and almost four times higher than the S&P 500 average. Realty Income shares fell on pessimism around the real estate industry and high interest rates, and as a result, the dividend yield rose. However, investors are becoming more confident, and the price has risen in the past few weeks.

Realty Income real estate investing is a sure-fire way to earn passive income for life. Now is a great time to buy before prices rise and yields fall.

Is it worth investing $1,000 in Coca-Cola now?

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Jennifer Saibil has no position in any stocks mentioned. Jeremy Bowman has no position in any stocks mentioned. John Ballard has no position in any stocks mentioned. The Motley Fool has a position in and recommends Realty Income. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.