2 Dividend Stocks to Buy for 2025 and Beyond

Dividend investing will likely never go out of style. This is not only because people generally like the idea of earning some money while doing nothing, but also because companies that consistently pay and increase their payouts usually have excellent underlying businesses. That's primarily why dividend stocks have outperformed their non-dividend-paying peers over long periods. So, investing in top income stocks is not a bad way to kick off 2025.

Here are two excellent candidates to consider: Coca-Cola (NYSE: KO) and Visa (NYSE: V).

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

1. Coca-Cola

Brand names matter. Few companies worldwide have a stronger brand than Coca-Cola, a soft drink market leader. Coca-Cola's name, reputation, and presence in practically every country known to man means it will continue to attract a good amount of business. That's the company's competitive edge. Further, it isn't just a soft drinks leader, although that is how it made its name. Coca-Cola has significantly diversified its portfolio. It offers practically everything from alcohol to coffee and tea, sports drinks, energy brands, and water.

Coca-Cola's diversification is an essential part of its strategy. It allows it to cater to the needs and preferences of different markets. And with rising concerns over the health impact of some of its more popular offerings, this strategy has also helped it decrease its exposure to these less healthy options. So, the company can survive and thrive in a more health-conscious market. True, Coca-Cola probably isn't a particularly attractive growth stock. Don't expect the stock to keep up with artificial intelligence leaders.

What it does offer, though, is consistency and reliability. Coca-Cola records steady revenue and profits.

KO Revenue (Quarterly) data by YCharts.

It has done so for a long time, which is how it has supported its incredible dividend track record. Coca-Cola is a Dividend King with an active streak of 62 consecutive payout increases. The company's forward yield is 3.11%, well above the S&P 500's average of 1.32%. Coca-Cola's payout ratio looks a bit high at 74%, but the company has often maintained a pretty high payout ratio while still increasing its dividends. Investors have nothing to worry about: Coca-Cola will remain an excellent income stock beyond 2025. It's little wonder the business remains one of Warren Buffett's favorites.

2. Visa

Like Coca-Cola, Visa has one of the most powerful brands in its market. Millions of credit cards in circulation bear the logo of the financial industry giant, which cuts a fee for every transaction it helps facilitate through its payment network. True, the company's business can be susceptible to recessions. When the going gets rough and consumers start spending less, Visa's payment volume can drop, leading to lower revenue and earnings for the company.

No business is risk free, and so long as Visa's performance in good times can more than make up for the slowdown in bad times, the company will be just fine. In fact, Visa should benefit as the cash displacement phenomenon continues. People switching from cash transactions to credit cards and digital forms of payment have been a tailwind for Visa for a while, but cash and checks haven't been completely phased out yet -- not even close. There are still trillions of dollars worth of payment volume the company can bring into its ecosystem.

And while Visa won't capture this entire market, it doesn't need to. Even grabbing a small slice of the remaining available pie -- which will probably get bigger over the long run -- will allow Visa to continue growing its revenue and earnings at a good clip for a while. Further, the company's network effect means it is likely to remain a top dog in the industry. In short, Visa has a strong moat and excellent growth prospects, all of which have usually led to solid financial results.

V Revenue (Annual) data by YCharts.

Lastly, the company's dividends have grown by almost 392% in the past decade. Though Visa's forward yield is pretty low, only 0.74%, it is still an attractive income stock to hold onto for a while, given its robust underlying business and a payout ratio of 21.36%, which leaves ample space for more dividend growth.

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

Before you buy stock in Coca-Cola, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Coca-Cola wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $823,000!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of December 30, 2024

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Visa. The Motley Fool has a disclosure policy.