Unlike growth investors, dividend investors tend to be more risk-averse and focus on earning income that is safe and, ideally, growing over time. This is true of most dividend stocks, as those companies have the freedom to adjust dividend payments at any time for any reason.
To protect themselves from this, investors tend to target stocks that increase their dividends at least once a year. In these cases, confidence in the stock relies partially on these periodic payout hikes, making it unlikely a company would cut or eliminate a dividend if it can afford to pay it.
That strategy allows income investors to sleep soundly, as these stocks will likely continue providing steady, reliable dividend income.
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Realty Income
Realty Income (O +0.70%) owns about 15,500 single-tenant net-leased properties. Under the terms of these agreements, the tenant covers taxes, insurance, and maintenance, leaving the real estate investment trust (REIT) with a steady revenue source.
Its client base includes stalwarts such as Dollar General, Wynn Resorts, and FedEx, and with its property base nearly 99% leased, it is continuously working to develop and acquire similar properties.
Moreover, Realty Income bills itself as the “Monthly Dividend Company,” and true to its name, has paid a dividend every month since 1994. This annual payout of almost $3.25 per share offers a dividend yield of 5%, far above the S&P 500 average of 1.1%. The payout has also risen at least once per year since inception, likely indicating that the trend will continue.
Today’s Change
(0.70%) $0.45
Current Price
$65.09
Key Data Points
Market Cap
$61B
Day’s Range
$64.27 – $65.27
52wk Range
$54.38 – $67.94
Volume
5.2M
Avg Vol
6.3M
Gross Margin
48.73%
Dividend Yield
4.97%
Furthermore, the stock is less expensive than it appears. Even though it has a 55 P/E ratio, the more meaningful metric for this REIT is funds from operations (FFO) income, which is a measure of its free cash flow.
The company generated $4.25 per share in FFO income. That not only covers the dividend, but also gives it a price-to-FFO ratio of 15, meaning investors can buy this stock at a bargain while they hold a stock built for income.
PepsiCo
Investors know PepsiCo (PEP 0.45%) best for its flagship cola beverage, though it also owns brands such as Gatorade, Tropicana, Doritos, and Quaker.
Today, consumers have become health-conscious and have more frequently avoided such products. In response, the company has emphasized products with less sugar and sodium and has acquired brands like Siete Foods to more closely align with evolving consumer tastes.
Today’s Change
(-0.45%) $-0.71
Current Price
$157.67
Key Data Points
Market Cap
$216B
Day’s Range
$156.47 – $160.03
52wk Range
$127.60 – $171.48
Volume
7.8M
Avg Vol
7.6M
Gross Margin
54.22%
Dividend Yield
3.61%
Despite such worries, PepsiCo is a Dividend King by virtue of its 54 straight years of payout hikes. This streak shows that it can stay successful in good times and bad. The current dividend of $5.69 per share yields about 3.6%.
Furthermore, its efforts may have started to boost sales. Net revenue rose 2% in 2025, and by almost 9% in the first quarter of 2026, indicating it has managed to keep growth positive despite headwinds. Also, in 2025, the $9.3 billion in free cash flow over the trailing 12 months covered the $7.7 billion in dividend costs even under challenging conditions, meaning the payout is likely still safe.
Also, the 26 P/E ratio is slightly below its five-year average of 27. Considering its diverse product portfolio and proven ability to maintain dividend growth over time, PepsiCo is likely to keep income investors happy.
J.M. Smucker
Like PepsiCo, J.M. Smucker (SJM +1.66%) is a portfolio of consumer brands under one umbrella. Aside from its Smucker’s fruit spreads, its also owns Jif peanut butter, Folgers coffee, Hostess cakes, and Meow Mix cat food.
Nonetheless, sales have suffered as its acquisition of Hostess Cakes has brought integration challenges. Also, sales levels have not lived up to expectations, and the company faces pressure from rising commodity prices.
However, that could play into the hands of dividend investors, especially since J.M. Smucker’s payout has risen for 24 straight years. The current yearly payout of $4.40 per share now yields 4.7%.
In the first nine months of fiscal 2026 (ended Jan. 31), sales rose by 3% compared to year-ago levels. Furthermore, its free cash flow of $672 million for the first three quarters of the fiscal year easily covered its $348 million in dividend costs.
Today’s Change
(1.66%) $1.56
Current Price
$95.50
Key Data Points
Market Cap
$10B
Day’s Range
$93.50 – $96.39
52wk Range
$88.25 – $119.39
Volume
2.8M
Avg Vol
2.1M
Gross Margin
33.34%
Dividend Yield
4.59%
Admittedly, the stock has trended downward since 2023, and sells at a discount of more than 40% from its all-time high. Still, the stock’s P/E ratio has fallen to 22, and for those buying the stock for the payout, J.M. Smucker remains well positioned to sustain its high-yielding dividend.
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