Investors prefer dividend stocks for the stability and income stream. This enhances the total return potential and keeps your money growing. If you want to see your money working for you, invest in dividend stocks. Reinvest the dividends and watch your portfolio grow. Despite the constant market volatility due to the tariff deadlines, investors have remained consistent with their dividend picks, and if you’re looking to add a few more dividend stocks to your portfolio, here’s what I’d suggest.
PepsiCo
A top consumer staples stock, PepsiCo (NASDAQ:PEP) has a global presence and is known for its strong brand portfolio. The business has grown over the years despite the many ups and downs. It reported impressive second-quarter results and has a dividend yield of 4.07%.
PepsiCo beat Wall Street expectations and reiterated the full-year outlook. Its revenue stood at $22.73 billion, and the EPS came in at $2.12. Its organic revenue increased 2.1% in the quarter, and the net sales increased 1%.
It saw another quarter of volume drop in North America, but the management has a plan to turn around the business. It is moving towards protein and multicultural product offerings to meet the changing demand of consumers. The management is also cutting costs and has closed two manufacturing plants for the North American food business.
Pepsi’s global presence and diversified portfolio allow it to sustain the dividends even in uncertain times. The company’s position remains strong, and I believe it will continue to grow dividends.
PEP stock is exchanging hands for $139, down 7% in 2025 and 19% in 12 months. It is an undervalued stock with a strong potential to become an industry winner. The company has increased its dividends for 53 consecutive years and has a 5-year dividend growth rate of 7.14%. PepsiCo is a buy in the dip.
Chevron Corporation
The American oil and gas company Chevron (NYSE:CVX) is another dividend stock worth buying now. Chevron has an upstream and a downstream business that continues to generate steady cash flow despite the fluctuation in oil prices. The company has a dividend yield of 4.5% and has increased its dividends for 38 consecutive years.
Chevron has a strong balance sheet and focuses on capital efficiency to achieve growth. It entered into an agreement to buy Hess Corp. (NYSE: HES) in 2023 for $53 billion. The deal was recently completed. Chevron was already a great business, and the Hess deal makes it an excellent business. The acquisition will add assets in the Gulf of Mexico and the Bakken formation, ultimately leading to higher cash flow.
Trading for $151, CVX stock is up 2.9% year-to-date and 4.4% in 12 months. The company recently reported second-quarter results and beat estimates. Its revenue stood at $44.82 billion, and the EPS came in at $1.77. It saw a 44% drop in net income. The company saw a 3% year-over-year rise in global production in the quarter, while the U.S. production was up 8%.
Despite a drop in earnings, the company generated $4.9 billion in free cash flow for the second quarter. The increase was driven by higher cash distributions from the investment in the Kazakhstan joint venture. Chevron expects the cash flow to grow next year by ramping up its output through recently completed projects in the Gulf.
Considering Chevron’s history, it will continue to increase dividends in the coming years. This is a stock that promises steady income and capital appreciation.
Realty Income
Realty Income (NYSE:O) is a real estate investment trust that invests in commercial properties and pays monthly dividends. It has a high dividend yield of 5.63% and has increased its monthly dividends 131 times since its public listing.
Exchanging hands for $57, O stock is up 9.22% year-to-date. Realty Income is a convenient way for investors to own real estate without blocking a large sum of money. The diversified REIT offers a stable payout with steady rental income.
It leases properties to top companies in the world, and the lease covers all the property operating costs, including taxes and insurance. Realty Income is on an expansion spree and continues to acquire properties secured by long-term net leases. Its business spans across countries and includes a wide range of properties across industries. It has a low cost of operation, allowing it to distribute steady dividends.
Realty Income is a reliable business to own in uncertain times like today. Its 5-year dividend growth rate is 3.58% and it has a payout ratio of 75%. If you’re looking for monthly dividends and a steady source of income, Realty Income stock won’t disappoint.
Merck
Pharmaceutical company Merck (NYSE:MRK) is an undervalued dividend stock worth buying now. Exchanging hands for $80, the stock is down 19% year-to-date and 28% in 12 months. However, the stock has a lot of potential to bounce back. It has a dividend yield of 4.02% and has increased dividends for 15 consecutive years.
Merck recently reported second-quarter results with revenue of $15.81 billion, a 2% year-over-year drop, and an EPS of $2.13. It reported a net income of $4.43 billion. The management is working to cut $3 billion in costs by the end of 2027 to support the new launches. This move is to offset the revenue loss from the patent expiration of Keytruda in 2028.
Merck and several other pharmacy businesses will be impacted by tariffs, which have led Merck to invest billions to expand its manufacturing footprint in the U.S. It has a strong pipeline of drugs, and 30+ are in Phase 3, while 5 are under review. The company has narrowed its full year sales guidance, which led to a drop in the stock.
While it was a mixed quarter, Merck announced a quarterly dividend of $0.81 per share. The company has a payout ratio of 41% and a 5-year dividend growth rate of 7.11%. For the long term, Merck is one of the best dividend stocks to own.
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