We aren't even halfway through 2025, and already, it has been a roller-coaster year in the stock market. The major indexes incurred steep sell-offs, only to snap back like nothing happened.
Some investors may be looking for ways to take their feet off the gas by investing in stocks that distribute a portion of their profits to shareholders through dividends. Dividends are a great way to generate passive income, no matter what the stock market is doing. This can be a good approach for risk-averse investors, folks looking to preserve capital, or even investors who feel they have plenty of exposure to growth stocks and are looking to balance their portfolios.
Here's why Devon Energy (DVN 2.95%), Brookfield Infrastructure (BIP -2.60%) (BIPC -1.91%), and Clorox (CLX -3.35%) stand out as three dividend stocks to buy in June.
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Devon Energy offers a sustainable dividend to energy investors
Lee Samaha (Devon Energy): Now, I know what you are thinking, and you have a point. How can an oil and gas exploration and production company be an ultra-reliable dividend stock? The answer lies in your degree of comfort with the price of oil.
To put matters into context, Devon Energy's management calculates that its "breakeven funding level" is $45 per barrel. In other words, that's the minimum price of oil the company needs to fund all its costs, operations, debt, and its fixed dividend.
Suppose you are comfortable with the implied assumption regarding the price of oil. In that case, you will be comfortable with the notion that Devon can sustain its current $0.96-per-share dividend, which translates to a dividend yield of more than 3%.
Moreover, based on the current price of oil of $63 per barrel, Devon could pay even more in dividends and/or continue buying back shares. Assuming a price of oil of $60 per barrel, management believes it will generate $2.6 billion in free cash flow (FCF) in 2025, a figure equivalent to 12.9% of its current market capitalization. In theory, that's what Devon's dividend yield could be if it used all its FCF to pay the dividend. All in all, Devon's dividend appears sustainable, barring a significant decline in oil prices.
Brookfield Infrastructure is a high-yield dividend stock that's on sale to start summer
Scott Levine (Brookfield Infrastructure): Building positions in trustworthy dividend stocks is a tried-and-true way for investors to fortify their portfolios. When reliable stocks like Brookfield Infrastructure -- along with its 5.2% forward-yielding dividend -- are available at a discount, therefore, investors would be wise to sit up and take notice. And that's exactly the opportunity that's now presented with shares of Brookfield Infrastructure trading at a discount to their historical valuation.
While investing in Brookfield Infrastructure doesn't offer a sizable growth opportunity like those artificial intelligence stocks or space stocks may offer, it does provide a conservative approach to procuring plentiful passive income. The company operates a massive portfolio of global infrastructure assets including (but not limited to) rail, data centers, and oil pipelines.
The allure of Brookfield Infrastructure for income investors is that the company generates ample funds from operations to cover its dividend payments.
BIP FFO Per Share (Annual) data by YCharts.
Over the past 15 years, the company has excelled at growing its funds from operations. From 2009 to 2024, Brookfield Infrastructure has increased its funds from operations at a 14% compound annual growth rate. While this doesn't guarantee the same results for the next 15 years, it's certainly an auspicious sign that should inspire confidence in management's ability to grow the business -- which is encouraging for those looking for passive income.
Currently, Brookfield Infrastructure stock is changing hands at 3.1 times operating cash flow, a discount to its five-year average cash-flow multiple of 4. Today's clearly a great time to load up on the stock while it's sitting in the bargain bin.
A safe dividend stock for passive-income investors
Daniel Foelber (Clorox): Clorox stock has been hit hard by a slower-than-expected turnaround, tariff risks, and cost pressures. But the maker of Clorox cleaning products, Kingsford charcoal, Burt's Bees, Hidden Valley Ranch dressing, Glad trash bags, and more could be a great high-yield dividend stock to buy for patient investors.
The great news for investors considering Clorox now is that the bulk of challenges related to its turnaround are likely over. The company's multiyear efforts to improve its internal operations -- known as its enterprise resource planning (ERP) system -- is set to begin adding cost benefits to Clorox in calendar year 2026.
Clorox's results have been improving. The company has achieved 10 consecutive quarters of gross margin expansion, showcasing better cost management even amid slower sales. Clorox expects to finish the fiscal year (ending June 30) with a 150-basis-point improvement in gross margin compared to fiscal 2024 -- even when factoring in tariff and cost pressures.
Clorox is heading in the right direction, but the stock may be selling off simply because investors have grown impatient with the company's multiyear turnaround. Another factor could be opportunity cost.
Clorox yields a hefty 3.8% and has 48 consecutive years of dividend increases -- but with three-month Treasury bills at 4.4%, some investors may prefer to go with the risk-free option.
Clorox is far from the only struggling high-yield consumer-focused brand to see its stock price around multiyear lows. Another example is Target, which has an even higher dividend yield than Clorox and has over 50 consecutive years of increasing its payout. Yet investors have grown impatient due to sluggish sales growth and weakening margins.
All told, Clorox is an excellent high-yield dividend stock for folks who want to participate in the stock market to collect passive income rather than go with non-equity products like T-bills.
