2 Dividend Stocks to Buy for a Lifetime of Passive Income

Some of the best income investments are the stocks of brands people buy every day in the grocery store. People have been drinking Coca-Cola (NYSE: KO) and eating Hershey (NYSE: HSY) chocolate for over 100 years, and that's not likely going to change. Here's why these top dividend stocks are solid buys right now.

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1. Coca-Cola

Coca-Cola owns a large portfolio of beverage brands that generate consistent revenue and profits, which fund growing dividend payments. Despite economic hurdles with inflation and choppy consumer spending trends over the past few years, the stock has returned 21% over the last three years and currently offers an attractive forward dividend yield of 3%.

People are not going to stop consuming orange juice, water, coffee, tea, energy beverages, and carbonated soft drinks. Coca-Cola owns top brands across all these categories. This provides opportunities across different occasions to generate sales.

Coca-Cola reported a 1% decline in unit case volume last quarter, reflecting the weak consumer spending trends it has dealt with recently. But higher selling prices drove a 5% year-over-year increase in adjusted (non-GAAP) revenue.

Its strong brands generate healthy margins that support the dividend. Coca-Cola generated $12 billion in net income on $47 billion of revenue over the last year. Through the first half of 2025, it paid out over $2.2 billion in dividends. Its full-year payout ratio is typically around 75% of earnings per share.

After increasing its quarterly dividend by 5% in March to $0.51, Coca-Cola has now increased its dividend for 63 consecutive years -- a testament to the strength of its brands and business strategy.

Investors can expect Coca-Cola to grow its adjusted earnings per share around 8% annually over the long term, which is consistent with management's goal. Combining this earnings growth with a 3% yield should put the total annualized return around 11%.

2. Hershey

Record-high cocoa prices and the recent tariffs on cocoa imports have hurt Hershey's earnings and stock performance. However, with the stock trading 29% below its previous peak (at the time of this writing) and offering a high yield, this is a great time to build a position.

Despite higher operating costs, Hershey is still profitable. Management cited healthy momentum in the business, with adjusted net sales (excluding currency changes) up 26% year over year. While adjusted earnings were down 5%, the company generated $1.6 billion in free cash flow and paid 65% of that in dividends over the last year.

In addition to its namesake brand, Hershey owns several recognizable candy brands like Twizzlers and Reese's. It has also expanded into snacks like Skinny Pop. Management noted that solid execution at driving sales is leading to market share gains in the U.S. confectionery and salty snacks markets.

Spikes in commodity prices have a way of working themselves out in the long run. But even with those higher costs, management has taken steps to mitigate higher commodity costs by raising prices and improving efficiency in the business. This will allow the business to emerge more profitable down the road once cocoa prices settle.

With cocoa prices recently coming down, this could be a great time to buy shares. The quarterly dividend is $1.37, bringing the forward yield to 2.85%. It has rarely offered a yield this high in the last 30 years.

Wall Street analysts believe Hershey will never grow earnings again, but this shows recency bias with recent headwinds and is unrealistic for this iconic chocolate brand. The stock may remain volatile in the near term, but investors should expect the business to continue paying dividends and rewarding shareholders for potentially decades to come.

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