With enough time and persistence, anyone can build a stock portfolio that pays thousands of dollars in dividend income every year. Dividend investing may not be the most efficient way to build wealth in the stock market, but there's no other style of investing that can compete with the warm feeling of having cash automatically deposited into your account every year from some of the strongest companies in the world.
Here are two timeless consumer brands that could pay you for the rest of your life.
1. Nike
Nike (NKE 0.19%) has paid a growing dividend since 2004. With the stock recently down 62% from its previous peak, now is your chance to get this top consumer brand at its highest dividend yield in 16 years.
NYSE: NKE
Key Data Points
The stock has fallen over weak sales performance. Revenue declined by 9% year over year in the first half of fiscal 2025 (which ends in May). Analysts expect earnings to fall 43% for the full year, according to Yahoo! Finance. But Nike's dividend is safe, as it distributed 37% of trailing-12-month earnings to shareholders, providing wiggle room in a down year for earnings.
The dividend has increased at an annualized rate of 11% over the last 10 years. The quarterly payment is currently $0.40, bringing its forward yield to an attractive 2.41%.
The company has a durably strong brand that can still win and deliver more dividend increases over the long term. This was highlighted last quarter by strong growth in running shoes, such as the Vomero 5, which doubled its revenue last quarter.
The success of Vomero 5 and other new releases demonstrates management's strategy to return to growth. It is fine-tuning its approach to lifestyle products like the Air Force 1, which contributes to the weak sales trends, and investing in new performance franchises.
Investors shouldn't buy the stock expecting a quick rebound. It just hit new lows following the company's fiscal third-quarter report. But if you're a dividend investor, now is the time to start building a position, since you'll get paid while you wait for the business to improve.
Nike benefits from strong brand recognition. And it has the resources and marketing capabilities to climb back to the top.
2. Coca-Cola
Coca-Cola (KO 1.03%) is a simple and highly profitable business. With more than 2.2 billion servings of its beverage products consumed annually, it generated almost $11 billion in profit last year on $47 billion of revenue. Strong brand power allows the company to price its products to earn healthy margins, which has led to 63 consecutive years of dividend increases.
NYSE: KO
Key Data Points
Coca-Cola is a timeless brand. The company owns many beverage products across tea, coffee, energy drinks, and water. This is allowing it to stay relevant, drive consistent sales every year, and remain nimble to meet shifting consumer preferences.
The strength of its brand was on full display the past few years. Despite inflation hurting consumer spending, Coca-Cola has been able to raise prices to offset higher costs and pump out more profits and dividends. Unit case volume increased just 1% last year, but its organic revenue grew 12% driven partly by higher selling prices.
Management is seeing opportunities to drive growth through tailoring products to local markets around the world, in addition to introducing new beverages. It is able to stimulate demand in the short term with innovations like the limited-edition Coke Zero Sugar Oreo in collaboration with Mondelez International, while also introducing new beverages that can have a lasting impact on growth, such as the recent success of Minute Maid Zero Sugar.
The stock currently offers a high forward yield of 2.96%. It doesn't require a lot of capital to make beverages, which allows Coke to distribute around three quarters of its earnings to shareholders in dividends. For investors looking to build up their passive income, Coca-Cola's brand strength and profitability should make for a rewarding investment that you can hold for a lifetime.
