3 Dividend Stocks to Buy and Hold Even if the Fed Keeps Raising Interest Rates.

The Federal Reserve recently raised its benchmark interest rate by 25 basis points to a target range of 3.75% to 4.00%, marking its first rate hike in more than three years as policymakers work to combat persistent inflation. But if the Fed keeps raising interest rates, dividend investors should not need to abandon stocks.

You just need companies whose customers keep showing up, whose boards treat the dividend as a core obligation, and whose 2026 moves point to staying power rather than quick fixes. Three stocks fit that narrative and are solid buys today.

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1. McDonald's: a "Dividend King" tied to everyday eating

McDonald's (NYSE: MCD) sits near the top of my dividend reliability list. In September, the board marked the company's 50th consecutive year of dividend increases and joined the club of "Dividend Kings," a small group of U.S. companies with half a century of annual raises. The latest declaration set the quarterly dividend at $1.93 per share, up 4%, with an annualized rate of $7.72, and management framed that record as proof of a durable business model and disciplined capital allocation.

Underneath this consistent payout, the story is simple. McDonald's sells affordable food in more than one hundred countries, runs an asset‑light franchise system, and keeps reinvesting in digital ordering, drive‑throughs, and store upgrades.

On top of this, McDonald's is reworking its value strategy after U.S. sales growth slowed recently, Bloomberg reported, with plans for a longer-term approach aimed at budget-conscious customers. It is using temporary deals and app promotions, including $2 breakfast sandwiches and free fries with a $1 purchase, to boost demand. So, if rates climb or cost pressures rise, the McDonald's customer base leans on value and convenience, which helps support cash flow that can continue to cover a growing dividend.

2. Colgate-Palmolive: toothpaste and soap funding a long dividend record

Colgate-Palmolive (NYSE: CL) lives in bathrooms and kitchens -- my bathroom included -- which is exactly why it holds up in tighter conditions. In March 2026, the board raised the quarterly common stock dividend to $0.53 per share from $0.52, lifting the annual rate to $2.12. Colgate has also paid uninterrupted dividends on its common stock since 1895.

The underlying business is built on repeat use. Second‑quarter 2026 results showed net sales up 4.9% and organic sales up 2.4%, with gross margin expanding by 140 basis points and base business earnings per share rising 8%.

I like Colgate because it has a strong global presence and sells products people use every day. Its brands reach more than 200 countries, with recent growth led by emerging markets including India, Brazil, Mexico, and China. Things like toothpaste and soap are purchases consumers tend to keep making even when the economy slows, giving Colgate a dependable cash flow even when the market gets tough.

3. Walmart: value, automation, and a dividend baked into the plan

Walmart (NASDAQ: WMT) anchors budgets when the cost of money rises. In its 2026 reporting and annual materials, Walmart made it clear that its capital allocation approach starts with investing in growth, then prioritizes the dividend, and finally repurchases shares with remaining free cash flow. That framework has maintained a regular dividend while the company invests heavily in automation, data, and digital capabilities.

In the past, Walmart has said it will turn rising rates and inflation into reasons to get more efficient rather than pull back. Recently, this has looked more like leaning into automation. Last year, more than 60% of U.S. stores received part of their freight from automated distribution centers, and roughly half of e‑commerce volume flowed through automated facilities.
Those investments support the core promise of low prices and quick delivery, which helps keep traffic and membership strong even when borrowing costs climb.

How these three can work through more hikes

If the Fed continues to keep pushing rates higher, McDonald's, Colgate-Palmolive, and Walmart give you three different streams of cash backed by everyday behavior: eating out, brushing teeth, and cleaning. All three have raised or reaffirmed dividends in 2026 and are treating those payments as part of how they run the business, not a leftover, which is exactly the mindset you want on your side when the cost of money stays in motion longer than you do.

Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Colgate-Palmolive and Walmart. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.