3 Top Dividend Stocks Yielding 4% or More to Buy Right Now for Passive Income

Dividend investors can still find yields of more than 4% from brands that find their way into grocery carts every day. PepsiCo (NASDAQ: PEP), Kimberly-Clark (NASDAQ: KMB), and McCormick (NYSE: MKC) all offer high yields and have paid consistent dividends for decades. Inflation and higher costs are weighing on many consumer staples this year, but these stocks remain solid income investments. Here's why.

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1. PepsiCo: 4.7% yield

PepsiCo owns several top food and beverage brands, including Gatorade, Doritos, and Lay's. Selling brands that people buy every day at convenience stores worldwide has led to years of steady sales and earnings, which is why it has been able to raise the dividend for 54 straight years.

Pepsi hiked its quarterly dividend by 4% in July, taking the annualized dividend to $5.92 a share. The stock's forward yield is about 4.7% as of Oct. 12.

The stock is down after the company lowered its 2026 earnings growth outlook. Management had expected full-year adjusted (meaning not in accord with generally accepted accounting principles) earnings to increase 4% to 6% in 2025. On the recent earnings call, it lowered that outlook to between 1% and 2%. Higher commodity costs are a near-term headwind, but the company is cutting corporate overhead to offset some of that pressure.

However, nothing has stopped the dividend payout. PepsiCo's free cash flow hit a record $10.5 billion on a trailing-12-month basis. During the past year, it paid out 75% of free cash flow, providing headroom to sustain and increase the dividend even in a year where earnings are under pressure. This is a rare opportunity to buy PepsiCo stock at a 4%-plus yield, funded by drinks and snacks people buy every week.

2. Kimberly-Clark: 5.3% yield

Kimberly-Clark makes Huggies diapers, Kleenex tissues, and Scott paper towels. Demand for these products will tend to rise with the population over the long term, which makes the recent dip and higher yield a great buying opportunity.

Steady demand for these everyday essentials has enabled it to raise its dividend for 54 consecutive years. The board declared a quarterly dividend of $1.28 on Aug. 3, or $5.12 a year. That rate put the forward yield at about 5.3%.

Its 92% payout relative to free cash flow is approaching an uncomfortable level. That reflects lower free cash flow during the past year from higher costs and a more promotional pricing environment. However, management is working to lower supply chain costs, including a $2 billion initiative expected to yield results during the next two years.

The company recently faced a backlash in China over product safety concerns about Huggies, but worldwide, it is showing resilience in a challenging economy. It delivered its 10th consecutive quarter of volume growth and held global market share.

Kimberly-Clark stock is still a buy for income. Its yield is supported by free cash flow, which should recover from cost-saving initiatives, and by steady demand for diapers and tissues.

3. McCormick: 4.3% yield

McCormick makes the seasonings and sauces that fill many households' spice racks, including French's mustard and Frank's RedHot. It has paid a dividend for 102 years.

The board declared a $0.48 quarterly dividend on Sept. 24, or $1.92 a year. That gives the stock a forward yield of about 4.3%. That yield is supported by free cash flow, with the company paying out 57% of that during the past year.

Sales rose 17% year over year last quarter (excluding currency changes). Its Cholula hot sauce brand gained market share in the U.S. for the fourth straight quarter, reflecting rising demand.

The stock is down as McCormick faces cost headwinds similar to those of Pepsi and Kimberly-Clark. A proposed merger with Unilever Foods also creates uncertainty around integration costs. Still, it would bring French's mustard and Hellmann's mayonnaise under one roof, creating a global flavor powerhouse.

McCormick has demonstrated resiliency through a challenging environment. The recent dip is a great opportunity to lock in a high yield on this top consumer staple.

John Ballard has no position in any of the stocks mentioned. The Motley Fool recommends McCormick. The Motley Fool has a disclosure policy.