4 Dividend Stocks Boomers Can Safely Buy Now and Hold Forever
Four Dividend Kings with streaks stretching back decades sit inside millions of retirement portfolios, but one of them is spending every dollar of free cash flow just to keep its streak alive. Here is how each payout holds up under…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Retirees who live on portfolio income need dividends that keep coming through recessions, rate shocks, and weak quarters. Four household names sit at the center of many of those portfolios: Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction), Procter & Gamble (NYSE:PG), Coca-Cola (NYSE:KO), and PepsiCo (NASDAQ:PEP). This year has tested each one differently. J&J is on track for its first year above $100 billion in revenue. Coca-Cola leveraged the FIFA World Cup to achieve its strongest comparable volume growth in 17 years (excluding the COVID-19 recovery period). P&G is absorbing about $1 billion in after-tax cost pressures, and PepsiCo is spending heavily to win back North American snack buyers.
| Metric | JNJ | PG | KO | PEP |
|---|---|---|---|---|
| Annual Dividend | $5.36 | $4.354 | $2.12 | $5.92 |
| Yield | 2.09% | 3.00% | 2.47% | 4.70% |
| Years of Increases | 64 | 70 | 64 | 54 |
| Latest Raise | 3.1% (April 2026) | 3.0% (April 2026) | 3.9% (Feb 2026) | 4% (June 2026) |
| Status | Dividend King | Dividend King | Dividend King | Dividend King |
The yields above use the October 2 closing prices. Below, I test each payout against earnings, cash flow, debt, and management guidance.
Three Payouts Sit Near 60% While PepsiCo Runs Hot
| Metric | JNJ | PG | KO | PEP |
|---|---|---|---|---|
| Earnings Payout | 61.9% (Healthy) | 64.8% (Healthy) | 63.1% (Healthy) | 76.0% (Elevated) |
| FCF Payout | 61.5% (Healthy) | 63.2% (Healthy) | 73.6% (Elevated) | ~103% (Concerning) |
| OCF Coverage | Not available | 1.96x (Adequate) | 1.60x (Adequate) | Not available |
At the current rate, J&J’s dividend costs about $12.9 billion a year, compared with a full-year free cash flow outlook that is approaching $21 billion. Trailing EPS of $8.53 includes litigation charges, which drive the earnings payout up. Measured against the low end of adjusted EPS guidance ($11.50), the payout falls to 46.6%.
P&G paid over $10 billion in dividends against $15.835 billion in free cash flow, and free cash flow rose 12.74%. Selling Tide and Pampers produces steady cash. Coca-Cola’s approximately $9.1 billion dividend bill is covered by guided free cash flow of ~$12.4 billion.
PepsiCo’s dividend coverage is the tightest of the four. It plans ~$7.9 billion in 2026 dividends. Its price-to-free-cash-flow multiple of 22 implies trailing free cash flow of about $7.67 billion, leaving the dividend consuming virtually all of it. Management is aiming for free cash flow conversion of at least 80%, and it will have to hit that target.
J&J’s AAA Balance Sheet Stands Apart
| Metric | JNJ | PG | KO | PEP |
|---|---|---|---|---|
| Leverage Ratio | 0.58 (Conservative) | Not available | 1.47 (Moderate) | 2.45 (Aggressive) |
| Net Debt/EBITDA | 0.80x (Low) | Not available | 2.49x (Manageable) | 2.31x (Manageable) |
| Interest Coverage | Not available | Not available | 8.32x (Strong) | 12.03x (Strong) |
| Cash | ~$21B (Solid Buffer) | $9.942B (Solid Buffer) | $12.907B (Solid Buffer) | $10.251B (Solid Buffer) |
J&J has about $49 billion of debt against $21 billion of cash and securities, and it is one of only two U.S. companies with a AAA credit rating. It guides net interest expense to just $250 million to $300 million. Coca-Cola reports net leverage of 1.4 times, below its target of 2 to 2.5 times. P&G doesn’t break out total debt, so its leverage ratios aren’t available. Shareholders’ equity of $54.311 billion and EBITDA of $24.752 billion point to plenty of capacity.
Every Streak Holds, and PepsiCo Has Raised Fastest
| Year (Quarterly Rate) | JNJ | PG | KO | PEP |
|---|---|---|---|---|
| 2026 | $1.34 | $1.0885 | $0.53 | $1.48 |
| 2025 | $1.30 | $1.0568 | $0.51 | $1.4225 |
| 2024 | $1.24 | $1.0065 | $0.485 | $1.355 |
| 2023 | $1.19 | $0.9407 | $0.46 | $1.265 |
| 2022 | $1.13 | $0.9133 | $0.44 | $1.15 |
| 5-Year CAGR | 4.8% | 4.6% | 4.8% | 6.6% |
None of the four shows a cut in quarterly records going back to 1999. P&G has paid a dividend for 136 straight years. This year’s raises fell between 3% and 4% for all four companies, so dividend growth has slowed to the low single digits.
Executives Keep the Dividend First in Line for Cash
J&J CFO Joe Wolk said on the second-quarter call: “We also remain committed to returning capital directly to shareholders, primarily through our dividend.” P&G plans over $10 billion in fiscal 2027 dividends, and CEO Shailesh Jejurikar described fiscal 2026 as a year in which the company continued to “return high levels of cash to shareowners despite a very challenging geopolitical and economic environment.” Coca-Cola CFO John Murphy said, “Given the momentum of our business and the strength of our balance sheet, we have increased flexibility and optionality to continue to both reinvest in our business and return capital to shareholders.”
PepsiCo CEO Ramon Laguarta confirmed the “54th consecutive annual increase” in the first quarter. In July, though, the CFO warned that EPS could land toward the low end of guidance. The commitment is there, but PepsiCo has the least room to absorb a miss.
J&J and P&G Earn Top Marks, but PepsiCo Needs a Wider Cushion
- Johnson & Johnson: Very Safe. The FCF payout is 61.5%, leverage is 0.80x, and the company carries an AAA rating.
- Procter & Gamble: Very Safe. The FCF payout is 63.2% and free cash flow is rising, though fiscal 2027 core EPS guidance of $6.89 to $7.11 points to slow growth.
- Coca-Cola: Safe. The FCF payout is 73.6%, and leverage sits below the company’s own target.
- PepsiCo carries a moderate level of risk. The dividend uses about 103% of free cash flow, and debt-to-equity is 2.45.
All four dividends look well covered if J&J’s free cash flow comes in near $21 billion and PepsiCo’s affordability spending wins back North American snack volume. PepsiCo’s dividend faces more pressure if its free cash flow conversion falls short of 80%, as does P&G’s dividend if Brent crude stays above the $90-per-barrel level assumed in its cost guidance. PepsiCo has the highest yield, but J&J and P&G have the safest dividends.
Contact [email protected] for any questions or corrections.
Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as creative services director at an NBC affiliate in Austin, Texas, gives him unique insight into the financial industry.
Lee Jackson's journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
