If you're looking to boost your passive income, Coca-Cola (KO 0.17%) and AT&T (T -0.11%) are solid dividend stock choices right now. These companies generate repeat revenue from consumers throughout the year, and their stocks currently offer above-average dividend yields. Here's why buying more of their shares, or starting a new position, makes sense for 2025 and beyond.
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1. Coca-Cola
Top consumer brands that sell affordable goods in mass volume every year can make some of the best dividend stocks to hold in your portfolio. Coca-Cola share prices are up 11.2% this year, significantly outperforming the broader market despite near-term uncertainty for the economy. The stock still offers a high dividend yield that makes it a great option for income investors.
People around the world consume over 2.2 billion servings of Coca-Cola's beverages every day. Its bottling and distribution systems are able to produce products in local markets around the world, which makes it resilient to the impact of tariffs on imported goods.
Other than its namesake brand, the company has a large portfolio across water, tea, juices, and carbonated beverages that contributes to $47 billion in trailing revenue.
Ultimately, the strength of its brand power is seen in its stellar profitability. The company earns high margins on sales.
It generated nearly $11 billion in net income over the last year, representing a profit margin over 20% -- more than double the corporate average. It typically pays out close to three-quarters of its profits in dividends.
It's an elite dividend payer, having increased its quarterly payment for 63 consecutive years. At the current quarterly rate of $0.51, the forward yield is an attractive 2.95%.
Investors should continue to see growing dividends over the long term, considering there are still opportunities to reach new consumers around the world. About 80% of the world's population lives in emerging markets, where less than a third of the people consume commercial beverage products. Coca-Cola has ample opportunities to expand, making it a no-brainer high-yield stock to buy.
Image source: AT&T.
2. AT&T
Leading wireless service providers are another great option for dividend investors, since these companies generate recurring revenue every month from people paying their bills to use phone and data services. AT&T is experiencing strong momentum in signing up new customers. The stock is up 16.3% so far this year and still offers a high yield.
The forward yield currently sits at 4.2%, which is attractive considering the strong subscriber additions AT&T has reported. Revenue grew 2% year over year in the 2025 first quarter, as it continued to add more subscribers to its wireless and fiber internet services. It doesn't seem like much growth, but this is solid for a large telecom business. Earnings grew even faster, which could increase the chances that management raises the dividend in the near future.
Investors should note that AT&T cut its dividend in 2022 in order to reduce its debt burden. Management has made progress on that objective -- which, along with strong financial results, has driven the stock up 53% over the past year. However, the company hasn't increased its dividend since cutting the quarterly payment to $0.2775 three years ago, but that could change in the next few years.
AT&T has paid out nearly 70% of its earnings in dividends, but as a percentage of free cash flow, the payout ratio is lower at 42%. The company paid $8.2 billion in dividends last year. With management calling for free cash flow to come in at $16 billion or more this year, there could be a dividend increase emerging on the horizon.
AT&T will likely resume dividend increases at some point. It is delivering solid growth in subscribers, which could support new highs for the stock this year. Continued debt reduction is another catalyst for the share price. The prospect of dividend increases only sweetens the deal for investors.
