Dividend investing never goes out of style, and the reason is simple: companies that pay and steadily raise their dividends let investors put compounding to work through reinvestment. Not every dividend stock deserves a permanent place in a portfolio, though. The ones worth holding for the long haul combine durable competitive advantages with the ability to keep growing their payouts through changing conditions.
Three household names fit that description, each from a different corner of the market and each offering a different kind of dividend story.
Coca-Cola (KO): The Dividend King That Keeps Adapting
Coca-Cola is one of the most recognizable brands on the planet, and it has stayed relevant by evolving with consumer tastes. New products, creative twists on classic ones, and acquisitions of additional brands have kept it among the leaders in its industry. The company estimates that it accounts for 2.2 billion of the 65 billion beverage servings consumed worldwide each day, which shows how much room it still has to grow.
The business has momentum. In the second quarter, Coca-Cola increased its share of the non-alcoholic ready-to-drink beverage market, and the company has delivered steady revenue and earnings growth this year. The shares trade around $95, up roughly 36% over the past year, for a market cap near $399 billion.
The dividend record is the headline. Coca-Cola has raised its payout for 64 consecutive years, making it a Dividend King, a title reserved for companies with 50 or more straight annual increases. The stock currently yields about 2.3%, and that streak looks unlikely to end anytime soon.
Microsoft (MSFT): A Tech Leader With a Growing Payout
Microsoft’s stock hit a new 52-week low in June but has rebounded since, even as some investors worry that artificial intelligence could erode demand for its services. The company’s latest quarterly update suggested otherwise. Microsoft has woven AI into its products and services, customers are buying it, and the added demand is helping revenue and earnings grow at a healthy pace. Its cloud business has been the standout.
This isn’t the first time a technological shift has threatened Microsoft, and over its long history, it has come out ahead each time. It also has a huge cash pile to put toward new growth opportunities as the AI and cloud markets expand.
Microsoft isn’t known as an income stock, and its forward yield of about 0.7% is modest. But it raises its dividend regularly, and that growth, combined with competitive overall returns, makes it a fit for long-term investors. Shares trade around $524, giving the company a market cap near $4 trillion.
Visa (V): A Wide Moat and a Fast-Growing Dividend
Visa has dealt with legal and regulatory challenges, including antitrust concerns, that have weighed on its stock in recent years. The core business, however, remains strong. Revenue and earnings have grown at a good clip in recent quarters, and Visa’s dominance in payment processing is largely intact.
The moat comes from a self-reinforcing network. With billions of cards in circulation, Visa becomes more attractive to merchants with every new cardholder, and more useful to cardholders with every new merchant. Growth in e-commerce and the broader shift to digital payments should keep expanding the market it serves.
Visa’s forward yield is only about 0.7%, but the payout has grown 306% over the past decade. Shares trade around $414, near the top of their 52-week range, for a market cap of roughly $761 billion.
