Investing in dividend-paying stocks can be a great way to earn passive income with minimal effort. While recent market fluctuations may have made it seem like money can be earned without much energy expended, experienced investors should be cautious about that claim. In reality, investing for yield often involves some level of risk and volatility.
To identify suitable dividend stocks, I considered three key factors: profitability, dividend yield, and price stability. My top picks include Merck (MRK), Kimberly-Clark (KMB), and PepsiCo (PEP).
Merck is a blue-chip pharmaceutical company with a long history of stable performance. Despite recent price fluctuations, its dividend yield has returned to 3% and the stock shows signs of a potential long-term rebound.
Kimberly-Clark is another established consumer staples company with a deeply entrenched market share in areas considered recession-resistant. Its business moat provides stability, making it an attractive option for long-term investors seeking passive income.
PepsiCo is a global beverage and food brand with a strong distribution network. While its yield may be average for its sector, its nearly triple that of the S&P 500 makes it a solid choice for those seeking stable dividend payments.
For those looking for a more mundane but historically sustainable path to earning income, these dividend stocks offer a reliable alternative to trendy tech stocks or cryptocurrencies.
Source: https://www.forbes.com/sites/investor-hub/article/best-dividend-stocks-passive-income-2025