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Have you ever looked high and low for something without realizing it was right in front of you the entire time? It’s a surprisingly common situation, especially for passive income investors seeking reliable dividend stocks. You may consider investing in Coca-Cola and Johnson and Johnson if this is your situation. These companies have achieved dual dividend king and dividend aristocrat status by making products you use every day.
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Coca-Cola may be the most recognizable American brand in the world. Since establishing itself 130 years ago, Coca-Cola has grown into an 800-lb. gorilla in the beverage sector. Today, Coca-Cola owns 500 different brands sold in 200 countries globally. These include Vitamin Water, Fuze Tea, BodyArmor, Minute Maid and Costa Coffee. This strategic expansion has given Coca-Cola a dominant market share.
Coca-Cola’s estimated market cap of $277 billion qualifies it as a member of the S&P 500. Add to Coca-Cola’s 62-year streak of increasing dividends and you have a stock that holds the titles of dividend king and dividend aristocrat. Benzinga’s latest stock ticker information shows Coca-Cola is currently paying a 3.01% dividend on its $64 share price. That moderate buy-in, plus the historic payout, helps explain why Warren Buffett loves this stock.
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Johnson and Johnson has been making and marketing household products of all shapes and sizes for over a century. This is the very definition of a “buy and hold” stock that you can earn income off for your lifetime and then pass on to your heirs. Johnson and Johnson’s name is not only instantly recognizable, but it also makes products that almost every American uses daily.
The company’s 135-year history is impressive enough, but the fact that Johnson and Johnson has increased its dividend payout for the last 61 years is astonishing. That means most baby boomers were in grade school the last time Johnson and Johnson cut its dividend. How’s that for reliable passive income? Benzinga’s stock ticker shows that Johnson and Johnson shares are trading at $155.01 and paying a 3.19% dividend.
Johnson and Johnson and Coca-Cola make very different products but have very similar profiles from an investment perspective. Both companies have a large market share in lucrative consumer product sectors. They have also proven their ability to perform for investors through up and down economic cycles. Considering that, it’s easy to understand why shares of both companies are in so many index funds as the “reliable” blue-chip moneymaker.
Buying shares in either company would be a good place to start for any investor. You may find other stocks that offer a higher potential dividend payout in the short term, but the risk usually increases with the payout size. With that said, if you want long-term passive income, Coca-Cola and Johnson and Johnson are worthy of strong consideration.
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