The Best Dividend Stocks to Buy in May

When volatility is dominating the stock market, there's nothing like holding a portfolio of stocks that deposit cash into your account every quarter. Many top consumer brands pay regular dividends from their earnings, and some of the best ones have increased their dividends every year for decades. Here are two to consider adding to your portfolio right now.

1. Coca-Cola

Coca-Cola (NYSE: KO) is a 139-year-old brand that continues to deliver returns for investors in 2025. It owns an array of beverage brands across the soda, juice, tea, coffee, energy, and water categories that combine to generate $47 billion in annual sales. Its impressive business performance is attracting investor attention -- the stock is up more than 14% year to date.

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The company recently increased its quarterly payout by 5% to $0.51 -- a move that brought its dividend-hiking streak to 63 consecutive years. Its forward dividend yield at the current share prices is now an attractive 2.8%.

With a payout ratio that has hovered at around three-quarters of annual earnings in recent years, Coca-Cola has enough financial flexibility to continue paying its dividends even during a recession. Despite rising macroeconomic uncertainty and turbulence in the first quarter, Coke's adjusted (non-GAAP) revenue increased by 6% year over year in the quarter. Its unit case volume grew 2% year over year, indicating stable demand overall.

This is a highly profitable business. Even if a recession put pressure on its top line, Coca-Cola could still deliver enough earnings to keep growing its dividend by effectively managing costs. In Q1, its adjusted operating margin improved by 1.4 percentage points over the prior-year period to 33.8%.

Moreover, management sees plenty of opportunities for growth over the long term, especially in emerging markets, which comprise around 80% of the world's population. In fact, the only market where its unit case volume fell last quarter was North America, and that decline was offset by stronger sales internationally.

The stock's high dividend yield -- about twice the 1.4% average of the S&P 500 -- and the company's diverse portfolio of beverage brands make Coca-Cola stock an excellent option for investors looking to boost their passive income.

2. Procter & Gamble

Procter & Gamble (NYSE: PG) is another consumer staples company that should make a dependable income investment. It has increased its dividend annually for 69 consecutive years -- an impressive track record. This reflects a strong portfolio that includes leading brands such as Charmin, Dawn, Crest, Oral-B, and Gillette.

P&G has been effective at using marketing, packaging, and investing in superior product performance to drive profitable sales growth. Over the last four reported quarters, the company earned $15.5 billion in net income on about $84 billion of sales. The company also continues to improve its supply chain efficiency and focus on its best-performing products -- a strategy that has led to gradually rising margins for many years.

The company's latest results show its resiliency ahead of an uncertain period for the economy. In its fiscal 2025 Q3, P&G's adjusted sales and earnings per share increased 1% year over year. Management has said that it expects higher costs from tariffs to reduce earnings in its current fiscal quarter by $0.03 to $0.05 per share. For the fiscal year, which ends in June, management's guidance calls for adjusted earnings to be up between 6% to 8%.

P&G just increased its quarterly dividend by 5% to $1.0568, which will give it a payout ratio of about two-thirds of its annualized earnings. That provides the company with plenty of wiggle room to maintain and keep raising payouts even in a challenging economy.

Investors who buy the shares around their current $160 price are looking at earning a forward yield of 2.6%. P&G has paid a dividend every year since 1890, which is impressive. The stock should hold up relatively well compared to the broader market in 2025 and continue to pay dividends for years to come.

Should you invest $1,000 in Coca-Cola right now?

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