All It Takes Is $10,000 Invested in Each of These 3 Dividend Stocks to Help Generate $1,239 in Yearly Passive Income

Many investors turn to income-generating stocks for passive income. This makes sense, as some companies have built a decades-long reputation of increasing dividends periodically, which can serve as an inflation hedge. Investors might also like the long-term potential for stock price appreciation, which can increase their overall wealth.

Nonetheless, dividend stocks come with significant risk. No companies -- other than real estate investment trusts (REITs) in specific situations -- are required to pay a dividend, and they have the power to reduce or even eliminate a payout at any time. Additionally, the average S&P 500 stock pays an abysmal dividend yield of 1%, comparing poorly to bonds and CDs.

Still, stocks that have increased payouts annually for years face tremendous pressure to maintain those streaks, so much so that approximately $10,000 invested in each of these stocks (about $30,000 total) could yield around $1,239 in annual passive income. Given that potential, income investors might want to consider these stocks.

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1. Realty Income

Investors looking for safe passive income should consider Realty Income (NYSE: O). As a REIT, it must pay at least 90% of its net income in the form of dividends, but the state of its business makes this minimum requirement less of a concern.

It owns approximately 15,600 single-tenant, net-leased properties. Also, its properties are nearly 99% leased, and with renters like Home Depot, Wynn Resorts, and Dollar General, it does not face major challenges with tenant defaults.

Moreover, investors will like its annual dividend of about $3.25 per share. Since it earned $4.26 per share in funds from operations (FFO) income over the trailing 12 months, this dividend is secure. Also, with the annual payout rising every year since 1994, it offers an added measure of safety.

Furthermore, it claims a dividend yield of 5.4%, meaning that buying 166 shares for $10,013 would yield $540 in annual income. As the number of properties, rents, and dividends rise, Realty Income should continue to deliver both growth and income.

2. Chevron

Chevron (NYSE: CVX) is one of the world's largest energy companies. It is involved in the production, distribution, refining, and marketing of oil products, and it also produces natural gas and petrochemicals. As one of the world's largest energy companies, it distributes products under the Chevron, Texaco, and Caltex brands.

Chevron stock is up for the year, though it has pulled back since late March despite the recent spike in oil prices. Also, the recent reopening of the Strait of Hormuz will likely lower oil prices in the near term, which could slow revenue growth for a time.

Still, consistent demand for its products makes Chevron a desirable dividend stock. It boasts an annual payout of $7.12 per share, and its dividend has risen for 39 consecutive years.

Additionally, its $13.8 billion in free cash flow was close to its $14 billion in dividend costs. However, it holds $5.3 billion and has typically generated enough free cash flow to cover its dividend. Thus, the payout is likely safe.

The dividend yields around 4%. Thus, with $9,897 buying 57 shares that generate around $406 in income, this brilliant energy stock should deliver an income stream that continues to rise.

3. Constellation Brands

Constellation Brands (NYSE: STZ) produces and markets alcoholic beverages. Most of its revenue comes from marketing popular Mexican beer brands like Corona, Pacifico, and Modelo, America's most popular beer in 2023. Also, it derives smaller percentages of revenue from wine and spirits.

Admittedly, the company and its stock have suffered in recent years as people consumed less alcohol. However, alcohol use has been traced to the early days of human history, making it likely that even if consumption falls, it is not going away.

Moreover, it has maintained a dividend and annual increases on that payout since 2015. Today, shareholders will earn $4.12 per share annually.

Additionally, despite falling consumption, Constellation can still afford its payout. In fiscal 2026 (ended Feb. 28), the $1.8 billion in free cash flow generated was well above the $716 million in dividend costs. That allowed the company not only to cover the payout but also to reduce the share count. In fiscal 2026, Constellation bought back 3% of the outstanding shares, which often leads to rising stock prices over time.

Also, amid the stock's struggles, its dividend yield is around 2.9%, meaning if an investor buys 71 shares for $10,024, they would return almost $293 in yearly income. Between the periodic payout hikes and the reduced number of shares, Constellation Brands' stock could drive positive shareholder returns even if alcohol consumption remains low.

Will Healy has positions in Realty Income. The Motley Fool has positions in and recommends Chevron, Home Depot, and Realty Income. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy.