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

The consumer staples sector is facing a trifecta of headwinds. This has investors deeply downbeat about companies like PepsiCo (NASDAQ: PEP), McCormick (NYSE: MKC), Clorox (NYSE: CLX), and Hormel (NYSE: HRL). However, all four are highly reliable dividend growers, and they've each survived material headwinds before. With yields as high as 5.7%, here's why dividend lovers should consider buying while the rest of Wall Street is fearful.

The problems are real

From a big-picture perspective, the market isn't missing anything. Consumer buying habits are changing, with a notable shift toward healthier products. That's as true for food companies like PepsiCo, McCormick, and Hormel as it is for the cleaning and hygiene products that Clorox is known for. At the same time, inflation has strained consumer budgets, leading many to pull back on spending. That inflation, meanwhile, is also increasing companies' costs, putting pressure on margins as it becomes increasingly difficult to push through price increases.

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That's why PepsiCo, McCormick, Hormel, and Clorox are all trading near their 52-week lows. However, those price drops are also why the companies are trading with historically attractive dividend yields. McCormick's dividend yield is 4.1%, PepsiCo's is 4.5%, Hormel's is 5.7%, and Clorox's is 5.7%. For comparison, the S&P 500 index's (SNPINDEX: ^GSPC) yield is roughly 1%, and the average consumer staples stock's yield is 2.2%. If you are a dividend lover, the lofty yields should be very attractive.

Been there, done that

The big story with each of these consumer staples companies is that they are proven survivors. That shows up most notably in their dividend histories. PepsiCo and Hormel are both Dividend Kings, with over 50 years of annual dividend increases. Clorox is on the verge of becoming a Dividend King, with 49 annual increases, if you include the most recent hike. And McCormick has increased its dividend annually for 39 years. Companies can't create dividend streaks like this without a strong business model executed well in both good times and bad.

PepsiCo is probably the most diversified business here, with sizable operations in beverages, snacks, and packaged foods. It has a global footprint and is actually one of the world's largest consumer staples companies. It can stand toe-to-toe with any of its competitors on brand strength, marketing skills, innovation, and distribution. Even conservative investors will likely find it appealing, noting that despite the headwinds, it grew organic sales by 3.1% in the third quarter of 2026.

McCormick is also likely to interest conservative investors. The company is a leading producer of spices and flavors. It grew organic sales by 1.9% in the third quarter. The big concern here is really around the company's plans to acquire Unilever's (NYSE: UL) food business. The deal will roughly double McCormick's business, making it a very large transaction. However, the company has a solid track record of successfully integrating acquisitions, and Unilever will be a large McCormick shareholder, so it has a vested interest in a positive outcome. If you can stomach a little uncertainty, you may want to step aboard.

Hormel has gone through some big changes over the last year or two. It has new leadership and has been selling non-core assets to focus on its most attractive business opportunities. And it just announced an acquisition in the food service space, which leans into one of its strongest growth opportunities. However, the real reason to consider buying Hormel while it remains deeply out of favor among investors is the company's relationship with The Hormel Foundation. The foundation controls nearly 47% of Hormel's shares and has a stated goal of keeping Hormel from being acquired. But, most importantly, the foundation uses the dividends it collects to further its philanthropic efforts, so it also has a vested interest in the sustainability and growth of the dividend. In other words, The Hormel Foundation is aligned with dividend investors, which suggests Hormel's dividend is safe.

Clorox is probably the most aggressive option here because it is best seen as a sharpshooter with an eclectic collection of consumer products. The list includes cleaning products, water filters, kitty litter, plastic bags, charcoal, and skin care, among other things. The company has faced a number of issues in the past few years, from a spike in demand for cleaning products during the coronavirus pandemic to a hacking incident that left it working with pen and paper. Along the way, the company has been upgrading its computer systems to better track and manage its business. It also just completed an acquisition, so there really are a lot of moving parts. However, management is upbeat, projecting sales growth of up to 14% in fiscal 2027, aided by the acquisition, and organic sales growth of up to 4.5%. For more aggressive investors, however, the company's long history of dividend growth suggests the risk-versus-reward balance is likely tilted toward reward.

Don't be myopically focused on the short term

The problem investors have with PepsiCo, McCormick, Hormel, and Clorox is that they are all facing near-term headwinds. But what Wall Street is missing is the long-term success that each company has achieved. Add in some pretty incredible dividend histories and high yields, and now could be an opportunistic time to buy one, or all, of these stocks for those who think in decades, not days.

Reuben Gregg Brewer has positions in Clorox, Hormel Foods, McCormick, PepsiCo, and Unilever. The Motley Fool recommends McCormick. The Motley Fool has a disclosure policy.