Admittedly, a broad stock market sell-off can feel scary. It feels like the bad news will never end, and investors have something new to worry about each day.
But these times will pass. The Great Recession and the early days of the pandemic, while painful to many people for various reasons, have passed. And the stock market's bear market eventually recovered. For long-term investors, these down markets can present a buying opportunity. That's because broad-based sell-offs affect strong companies, too.
These two dividend-paying stocks top my list for purchase when the next big sell-off occurs.
Image source: Getty Images.
1. Coca-Cola
Coca-Cola (KO +0.48%) sells beverages around the globe under highly recognized brands. These include its namesake brand, Sprite, and Fanta. Beyond soda, it also sells other beverages, like water, juice, and plant-based beverages.
Coca-Cola has struggled to grow volume. For all of 2025, sales, after removing the effects of foreign-currency translations and acquisitions/divestitures, grew a solid 5%. But price/mix added 4 percentage points, while concentrate sales boosted sales by 1 percentage point.
Still, this isn't concerning, given consumers' weariness following a sustained bout of inflation. As a sign of its brands' strength, Coca-Cola's products continued to gain market share.
NYSE: KO
Key Data Points
Meanwhile, Coca-Cola has built an impressive dividend history. In February of last year, the board of directors announced a more than 5% increase in the quarterly payout. That made it 63 straight years with a raise, and the company is a Dividend King. This is an elite group of companies that have increased dividends for at least 50 consecutive years. If history is any guide, investors can expect Coca-Cola to announce another increase shortly.
The company's payout ratio, which compares dividends to earnings, of 67% indicates Coca-Cola has the profit to support dividends. The shares sport a 2.6% dividend yield, 1.5 percentage points higher than the S&P 500 index's 1.1%.
2. Realty Income
Realty Income (O +0.25%) is a real estate investment trust (REIT), which typically makes ideal investments for dividend-hungry investors. That's because REITs must pay out at least 90% of their taxable income as dividends.
It gets about 80% of its rent from retail tenants, which may scare off investors, given the online threat and sensitivity to the economic cycle. But Realty Income has been doing this for a long time, and occupancy rates remain high. In the third quarter, it had an almost 99% occupancy rate, and it received a 3.5% rental rate increase on expiring leases.
NYSE: O
Key Data Points
Paying dividends monthly, Realty Income has historically raised the payout multiple times a year. It did so most recently in December. That ran its streak to 113 straight quarters in which the company raised dividends.
The company paid out about 75% of its third-quarter adjusted funds from operations (AFFO), a key metric for REITs since it measures cash flow available for distribution. Realty Income's shares have a 5% dividend yield.
