Investors looking for consistent income have a distinct set of preferences compared to those pursuing rapid capital appreciation. As some venture into higher-risk, earlier-stage companies aiming for outsized returns, others favor stable, established firms with a history of delivering reliable dividends. For those interested in steady passive income, two stocks stand out as particularly appealing options to buy and hold over the long term.
One of these is Coca-Cola (NYSE: KO), a dominant player in the global non-alcoholic ready-to-drink market with an impressive portfolio of over 200 beverages. The company’s board of directors is expected to announce an increase in its quarterly dividend this month, potentially marking the 64th consecutive year of dividend hikes. With a current yield of 2.59%, Coca-Cola has managed to boost its dividend payout by 46% over the past decade. The company’s resilience is noteworthy; its demand remains robust across varied economic climates, likely due to consumer habits surrounding small, everyday purchases.
Coca-Cola’s brand recognition fuels its competitive advantage and pricing power, positioning it favorably in the market. Its strategy of outsourcing bottling and distribution to third-party partners allows for enhanced profitability, demonstrated by a remarkable operating margin of 28.7% reported last year. This stability reassures investors that dividends are unlikely to face cuts regardless of economic conditions.
The other noteworthy stock is Lowe’s (NYSE: LOW), which is second only to Home Depot in the home improvement sector, reporting sales of $20.8 billion in Q3 2025. Lowe’s has also established a lengthy record of dividend payments since 1961 and notably raised its payout in May last year, resulting in more than 25 consecutive years of increases. Although its current dividend yield is 1.67%, the company has astonishingly increased its quarterly dividend by 329% in the past decade, markedly outpacing Coca-Cola.
While Home Depot often captures more attention, Lowe’s has effectively honed its strategy to increase revenue from professional customers, including contractors, plumbers, and electricians. This focus on a lucrative customer base, paired with a formidable physical presence, brand equity, and product availability, positions Lowe’s well for future success. Despite facing challenges such as the COVID-19 pandemic and supply chain disruptions, the company has posted an average quarterly operating margin of 11% over the past decade.
Both Coca-Cola and Lowe’s have proven to be resilient businesses able to weather various economic storms, making them solid options for those seeking to build a reliable income-generating portfolio. However, potential investors should remain aware that prioritizing these consumer stocks does not guarantee outperforming the broader market. The growth potential for such mature companies may be limited due to their already substantial size, but their consistent profitability and dividend payouts are likely to be well-received by income-focused investors.
Before making an investment decision regarding Coca-Cola, prospective buyers might also want to explore other recommendations from financial analysts. The Motley Fool’s Stock Advisor has identified ten stocks that it believes could produce significant returns, suggesting a broader range of investment opportunities. Historical data illustrates the potential returns from these selections, highlighting the impressive performance of companies like Netflix and Nvidia.
In today’s market, Coca-Cola and Lowe’s remain stalwarts that reflect a commitment to dividends, appealing to those who prioritize a steady income stream for the long haul.
