There's some peace that comes with knowing you'll be rewarded for owning a stock regardless of how its stock price behaves. That's the beauty of dividend stocks; simply being patient can pay off.
However, to get the most out of your dividend stocks, you need to give them time to compound. That's why investing in companies with longevity and stability you don't have to second-guess is important.
If you're looking for stocks that fit that description, look no further than Walmart (WMT +4.14%) and Coca-Cola (KO +0.69%). Both are Dividend Kings, which are companies that have increased their annual dividend for at least 50 consecutive years. That tells you a lot about how consistent and shareholder-friendly they are.
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1. The retail staple serving millions daily
Walmart has built its business on being a convenient, low-cost, one-stop shop. It might not have Amazon's tech-first reputation, but having a store within 10 miles of 90% of the U.S. population is something no other retailer can match. That in-person convenience is largely why Walmart consistently generates the most revenue from any company on the stock market.
NASDAQ: WMT
Key Data Points
With a yield of around 0.8%, Walmart is far from a high-income stock, but it's as reliable as they come. It has increased its dividend for 52 consecutive years, and it's safe to assume that streak isn't ending anytime soon. Its financials more than support it.
WMT Dividend Yield data by YCharts
An encouraging sign of Walmart's continued success is the amount of money it has invested into growing in areas beyond its traditional retail business. Its membership service (Walmart+) and advertising platform (Walmart Connect) are growing, and its fulfillment centers are expanding. These businesses have much higher margins than retail sales, which will ideally give Walmart greater financial flexibility.
If I'm planning to hold a stock forever, it'll have shown it can survive the best and worst of economic times. Walmart has shown that's the case. When people are financially comfortable, they shop at Walmart. When budgets are tight, people really shop at Walmart.
2. The undisputed beverage king
Coca-Cola is one of the market's premier blue-chip dividend stocks. It has 63 consecutive years of dividend increases and a yield that's routinely more than double the S&P 500 average.
NYSE: KO
Key Data Points
Coca-Cola has built a business that allows its products to reach most parts of the world. And it sells products that sell regardless of economic conditions. Whether it's a recession or a boom, people continue to buy their favorite Coca-Cola products.
And instead of becoming complacent, Coca-Cola has been willing to adjust its beverage portfolio to keep up with changing preferences. It has added plant-based drinks, zero-sugar options, alcohol, and a handful of other categories. Having an option for all consumers is a good way to ensure it stays the market leader even while tastes change.
At its size, you shouldn't expect Coca-Cola to be a growth stock, but it's one of the better income stocks on the market. You can hold it for the long haul and trust it'll keep returning cash your way.
