Investors who want both income and growth need to look closely at dividend stocks. The market's overall yield of about 2% is adequate for some needs, but many investors prefer above-average dividend yields that can play a key role in generating portfolio income. Weyerhaeuser (NYSE:WY), Kimberly-Clark (NYSE:KMB), and Coca-Cola (NYSE:KO) all have dividend yields of 3% or more, and they also have growth prospects that can add to long-term returns for their shareholders.

Make your portfolio grow like trees

Renewables have gotten a lot of attention in the energy industry, but one area in which renewable resources have always been a core part of the business model is with timber companies. Weyerhaeuser has been a key player in the timber industry for decades, with substantial forest assets concentrated largely in the Pacific Northwest. Strength in the housing market has played a key role in keeping demand for wood building materials high, and as the remainder of the construction industry starts to catch up, Weyerhaeuser could see continued strength.

Garage frame showing wood beams and plywood used in construction.

Image source: Weyerhaeuser.

Weyerhaeuser is structured as a real estate investment trust, which means it must distribute nearly all of its profit as dividend distributions  to qualify for favorable tax treatment. The REIT has a current yield of 3.5%, and with a fully integrated business model, Weyerhaeuser's growth prospects are even stronger because of its ability to produce low-cost wood products at the same time that it participates in key efforts elsewhere in the real estate, energy, and natural resources industries. That should point to continued success.

Meeting needs around the world

Consumer products are a popular business for dividend investors, and Kimberly-Clark is a perfect example of how building up a brand can create a valuable asset for consumer businesses. Products like Kleenex tissue, Huggies diapers, and Scott paper towels are staples for households around the world, and Kimberly-Clark can count on continued demand for these goods even during times of economic uncertainty. At the same time, the company's brands represent aspirational goals for many people in emerging markets around the world, and as consumers gain more purchasing power in growing economies, Kimberly-Clark has seen more customers migrate toward its higher-quality products.

Kimberly-Clark's dividend yield is a healthy 3.5%, but even more important for long-term investors is that the company has been able to give its investors regular increases to its dividend payouts over time. For 45 straight years, Kimberly-Clark has made annual boosts to its dividends. With continued solid prospects globally, investors can feel secure about Kimberly-Clark's ongoing ability to keep giving them the dividend income they want.

Coca-Cola fizzes higher

Finally, another well-known consumer brand also offers a solid dividend payout. Coca-Cola's dividend yield of 3.25% has kept it well ahead of the market average, and the beverage giant has an even longer history than Kimberly-Clark of rewarding its shareholders with rising dividends. The company earlier this year extended its streak of annual increases to 55 years, putting it among the cream of the crop in the stock market.

Coca-Cola has faced recent challenges related to its sugary soft drinks, but it has responded with efforts to diversify its portfolio of products and address health concerns with more nutritionally friendly options. Although some investors still worry about its ability to rebound fully, strategic efforts from Coca-Cola are aimed at improving the company's future prospects. Coca-Cola has a long history of success, and it has the staying power to adapt to changing consumer preferences.

Be smart with dividend stocks

When you're buying dividend stocks, high yields aren't enough. You also have to be comfortable with a company's business model. Coca-Cola, Kimberly-Clark, and Weyerhaeuser all combine current income with reasons for optimism about their prospects, and that makes them attractive stocks for dividend investors to consider.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.