Flying cars? Vacationing in space? There's no doubt that things will look different several decades from now. After all, we were still going to Blockbuster Video 30 years ago.
But some things will certainly stay the same. The option to reward shareholders with dividends is hardly likely to change anytime soon, and investors looking to fortify their personal finances with dividend-paying stocks are certainly making a smart move. For those committed to generating consistent passive income for many years to come, picking up shares of tried and true dividend stocks Coca-Cola (KO +0.78%), ExxonMobil (XOM 1.39%), and York Water (YORW 0.08%) would be a great move right now.
NYSE: KO
Key Data Points
Have Coke stock -- and a smile
With a history stretching back to the pouring of the first glass of Coca-Cola nearly 140 years go, it's clear that appetite for the iconic beverage has considerable staying power. Granted, consumer tastes have expanded beyond sugary sodas in recent years, but Coca-Cola is sensitive to this change and has taken steps to grow its product portfolio. This willingness to evolve its family of brands to slake consumers' thirst for healthier drink options serves the company well, and it suggests that management will probably exhibit flexibility in the coming years if consumer appetites change again.
There's no certainty that any company will pay dividends for the next few decades, but the fact that Coca-Cola is a Dividend King that has a history of raising its dividend higher for more than six decades is certainly noteworthy. Representing a sizable position in the Berkshire Hathaway portfolio, Coca-Cola stock, along with its 2.9% forward dividend yield, is a worthy consideration for those with lengthy investing horizons.
NYSE: XOM
Key Data Points
Play in the oil patch with ExxonMobil
Solar panels may pop up on your neighbors' roofs, and electric cars may zip past you on the highway, but a simple fact remains: Fossil fuels aren't disappearing from the energy landscape anytime soon. Investors interested in pumping passive income into their portfolios, therefore, would be well served to consider oil supermajor ExxonMobil stock along with its juicy 3.6% forward yield.
Transcending its history of 42 consecutive years of dividend raises, ExxonMobil has rewarded shareholders with a dividend for more than a century -- an encouraging sign that paying dividends is embedded in the corporation's identity. With ample operations that extend throughout the energy value chain, ExxonMobil generates robust free cash flow, even amid volatility in energy prices, from which the company has oftentimes been able to source its dividend payments over the past 30 years.
XOM Free Cash Flow Per Share (Annual) data by YCharts.
In fact, ExxonMobil projects that it will have $165 billion in excess cash after dividend payments from 2025 through 2030. With this cash, ExxonMobil can pursue additional growth opportunities to bolster the probability that it will have the resources to maintain dividend payments in the coming decades.
NASDAQ: YORW
Key Data Points
Quench your thirst for passive income with York Water
There's no denying the appeal of high-yield dividend stocks. But there's also something enticing about companies that have reliable business models that help them to distribute steady dividends through thick and thin -- companies like water utility York Water. Since 1816, this investor-owned utility has helped provide water service to residents of Pennsylvania, and all the while, it has been providing investors with dividends.
Risk-averse investors will often turn to utility stocks like York Water, with its 2.6% forward-yielding dividend, for passive income because these companies largely operate in regulated markets which help provide predictable cash flows. As is the case with York Water, the company can't arbitrarily raise customer rates when it desires. However, the Pennsylvania Public Utility Commission does ensure that the company receives certain rates of return. This helps management plan accordingly for capital expenditures such as acquisitions, infrastructure upgrades, and dividends.
YORW EPS Diluted (Annual) data by YCharts.
To further illustrate the appeal of York Water for those looking to mitigate risk with a safe dividend stock, York Water has taken an increasingly circumspect approach to its distribution since 2010 as its diluted earnings per share have grown at a greater clip than its dividend. Moreover, the company has averaged a conservative 58.3% payout ratio from 2015 to 2023.
Which dividend stock is the right choice?
For investors on the prowl for an effervescent dividend opportunity, Coca-Cola is a consumer-staples stalwart that's well worth further investigation. Similarly, those attracted to the energy sector to power their passive income would be wise to drill down into ExxonMobil stock. On the other hand, those looking for minimum risk will want to dip their toes into an investment with York Water.
Regardless of which opportunity one pursues, Coca-Cola, ExxonMobil, and York Water are three names that should continue rewarding shareholders for decades to come.
