Even With 10-Year Rates at 5.3%, I'd Still Rather Buy These 3 Dividend Stocks and Hold Through 2036

The 10-year Treasury yield recently touched its highest level in roughly two decades, north of 5.3%, per CNBC.

When the 10-year Treasury yield rises, stocks can become less attractive because investors can earn higher yields on safer bonds, and higher borrowing costs can weigh on companies and their growth. At the same time, older bonds with lower interest rates lose market value compared with newer, higher-yielding bonds.

In short, this yield is the interest rate the U.S. government pays to borrow for 10 years and is a key benchmark for global borrowing costs and economic outlook.

Here's a difference that matters. A Treasury note pays you the same coupon in year 10 that it pays you in year one. A growing dividend you can find in a stock doesn't sit still. It compounds. Buy the right business today, and the income it hands you a decade from now can be meaningfully larger than what it pays this year, on top of whatever the stock itself is worth by then.

A bond gives you back the same dollar. A good dividend stock gives you back more than you put.

Image source: Getty Images.

1. Church & Dwight: A silent compounder

Church & Dwight (NYSE: CHD), the maker of Arm & Hammer, Trojan, and OxiClean, yields barely 1.2% today. On paper, that loses to a 5.3% Treasury before you even finish reading the label.

But Church & Dwight has raised its dividend for 30 straight years, averaging about 4% annual growth recently, while management guides for 5% to 8% earnings growth this year alone. Run that dividend forward a decade at even a modest pace and the $1.23 per share it pays today could be pushing toward $1.80 or more by 2036, on a stock that's historically also climbed in price while it did it. The Treasury's coupon, by contrast, is frozen the day you buy it.

2. Nike: A battered brand still cutting the check

This one is risky. Nike (NYSE: NKE) is the least sexy name here, and the yield shows it: about 4.7%, inflated by a stock that's fallen over 75% from its high. That's a brutal stretch for a company this iconic.

But Nike is still on track to raise its dividend for a 25th consecutive year in 2026, even as it works through a multiyear turnaround and a $2.5 billion cost-cutting plan running through fiscal 2031. I'll be honest about the catch: recent earnings leaned on a one-time tax and tariff benefit, and without it, Nike's payout ratio is uncomfortably tight.

This isn't a sure thing. It's a bet that the Swoosh still means something in 2036, bought at a price that already assumes a lot of bad news.

3. Hormel Foods: The Dividend King with something to prove

Hormel Foods (NYSE: HRL) has raised its dividend for 60 consecutive years, a streak that has survived recessions most companies haven't. This makes it a Dividend King, a company that has delivered 50 or more consecutive years of annual dividend increases.

The stock's yield has climbed to around 5.6%, close to the Treasury itself, because the stock is down double digits this year on soft sales and margin pressure from input costs. The streak isn't in immediate danger, but Hormel needs its turnaround to continue chugging along, built around cost cuts to actually work. I'd own it for the streak and the yield, with eyes open about the next couple of years being the real test.

Why I'd still take all three over the bond

None of these three beats a 5.3% Treasury on yield alone today, and Nike and Hormel both carry some real, near-term risk I wouldn't wave away. But a Treasury held to maturity gives you exactly what you signed up for and nothing more: your coupon, then your principal back, worth less in 2036 dollars than it is today.

That's not my style. These three stocks give you some risk, but they also give you a rising income stream, a business that can grow earnings into that dividend over a decade, and the chance, not the guarantee, of real price appreciation on top.

That's the trade I'd make with new money today, not because 5.3% is a bad rate, but because the best consumer businesses have spent decades proving they can out-earn it, year after year, long after any single bond matures.

Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.