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Have you ever searched for something without realizing it was right in front of you the whole time? It’s a surprisingly common situation, especially for passive income investors looking for reliable dividend stocks. If this is your situation, you may want to consider investing in Coca-Cola and Johnson and Johnson. These companies have achieved dual Dividend King and Dividend Aristocrat status by creating products you use every day.
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Coca-Cola is perhaps the most recognizable American brand in the world. Since its founding 130 years ago, Coca-Cola has grown into an 800-lb. gorilla in the beverage sector. Today, Coca-Cola owns 500 different brands sold in 200 countries around the world. These include Vitamin Water, Fuze Tea, BodyArmor, Minute Maid and Costa Coffee. This strategic expansion has given Coca-Cola a dominant market share.
Coca-Cola’s estimated market cap of $277 billion qualifies Coca-Cola as a member of the S&P 500. Add to that Coca-Cola’s 62-year streak of rising dividends and you have a stock that carries the titles of Dividend King and Dividend Aristocrat. Benzinga’s latest stock price information shows that Coca-Cola currently pays a 3.01% dividend on its $64 share price. That moderate buy-in, plus the historic payout, helps explain why Warren Buffett likes this stock.
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Johnson and Johnson has been making and selling household products of all shapes and sizes for more than a century. This is the very definition of a ‘buy and hold’ stock that allows you to earn income throughout your life and then pass it on to your heirs. The Johnson and Johnson name is not only immediately recognizable, but it also makes products that almost every American uses every day.
The company’s 135-year history is impressive enough, but the fact that Johnson and Johnson has increased its dividend payout over the past 61 years is astonishing. That means most baby boomers were in grade school when Johnson and Johnson last cut the dividend. How’s that for reliable passive income? Benzinga’s stock ticker shows Johnson and Johnson stock trading at $155.01 and paying a 3.19% dividend.
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Johnson and Johnson and Coca-Cola make very different products, but have very similar profiles from an investment perspective. Both companies have large market shares in lucrative consumer products sectors. They have also proven their ability to deliver for investors in both up and down economic cycles. When you consider that, it’s easy to understand why both companies’ shares are in so many index funds as the “reliable” moneymaker.
Buying shares in both companies would be a good place to start for any investor. You may find other stocks that offer a higher potential dividend payout in the short term, but the risk usually increases the larger the payout is. That said, if you want long-term passive income, Coca-Cola and Johnson and Johnson are worth strong consideration.
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This article You buy products from these Dual Dividend Aristocrat and Dividend King stocks every day – why not earn passive income from their stocks? originally appeared on Benzinga.com
