Investing in the stock market to derive a stable income in the form of dividends can be a complex task, with a myriad of options to choose from. The article explores the top three dividend companies worth considering for investors seeking stability and sustainability in their dividends. With decades-long track records of consecutive dividend growth, these companies have proven themselves reliable investments, offering consistent returns to their shareholders.

Despite facing challenges, such as increased competition and market pressure, these companies have continued to adapt and innovate, driving growth through strategic investments in research and development, marketing, and sustainability. Their commitment to creating long-term value for shareholders while addressing societal and environmental challenges makes these dividend stocks stand out as industry leaders.

Best Dividend Stocks: Johnson & Johnson (JNJ)

Johnson & Johnson (NYSE:JNJ) has a record of consecutive dividend growth for 60 years and boasts a forward dividend yield of 2.73%, significantly above the sector median. With an annual payout of $4.52 and a payout ratio of 43.80%, it’s no wonder investors continue to flock to J&J.

Despite some challenges, J&J reported strong operational performance in the first quarter of 2023. While a net loss of $68 million and a basic loss per share of three cents may be concerning, it is primarily due to a one-time charge related to a Talc Settlement proposal. In addition, the company focuses on addressing its weaknesses, including the loss of exclusivity in certain products and decreased sales due to competition. 

J&J’s MedTech division saw strong growth in Q1, with promising advancements in key pipeline programs. The Orthopaedics division obtained CE Mark for its robotic-assisted solution, VELYS, positioning the company to expand its international footprint. In addition, J&J’s Consumer Health business delivered double-digit sales growth, and the company remains on track to complete its separation in 2023.

Despite some push and pull in its portfolio, J&J is optimistic about exceeding 2025 estimates. With a focus on R&D investment, strategic business development opportunities, dividend increases, and share repurchase programs, J&J’s capital allocation priorities remain consistent. In addition, the company expects continued growth in 2023 driven by critical assets in the Pharmaceuticals segment and increased procedures in MedTech. As a result, they maintain their guidance for adjusted pre-tax operating margin, other income and expense, interest expense, and tax rate but have increased their adjusted earnings per share guidance.

J&J anticipates stable procedure volumes and healthcare staffing levels for the remainder of the year with normal seasonality. In addition, the company plans to increase transparency by posting a patent table and hosting an enterprise business review in December. With a solid start to the year and raised guidance for full-year 2023, J&J is a dividend stock worth considering for your investment portfolio.

Coca-Cola (KO)

Coca-Cola (NYSE:KO) stands tall as a dividend stock for investors looking for consistent and sustainable returns. With a history of dividend growth for 60 consecutive years, the company offers a forward dividend yield of 2.90%, higher than the sector median of 2.60%. In addition, the annual payout for the company stands at $1.84, and it boasts a 5-year growth rate of 3.48%, all while maintaining a payout ratio of 70.97%.

Coca-Cola’s impressive growth over the last five years is a testament to its all-weather strategy, where consumers remain the center of everything they do. The company has identified significant growth opportunities in the commercial beverage industry, particularly in developing and emerging markets, where most of the sector remains untapped. Coca-Cola aims to continue gaining market share while creating new categories in the industry, such as hot beverages and alcohol.

The company has trimmed its portfolio of 400 brands to focus on what is consumer-centric, investing in strategic capabilities, digital marketing, infrastructure, and people. Coca-Cola has about 200 bottling partners worldwide, collectively having about 950 manufacturing facilities, delivering to 30 million customers worldwide, and doing about 2.2 billion servings of its products daily. In addition, the company invests in cold-drink equipment and the cultural side, resulting in significant improvements in employee engagement.

Coca-Cola’s marketing and innovation efforts focus on using first-party data to create personalized marketing opportunities, partnering with influencers and collaborating with other brands to drive brand awareness and engagement, and pioneering artificial intelligence (AI) to enhance creativity within its marketing department.

The company is committed to achieving its sustainability goals and aims to see about a quarter of its growth this year come from innovation. Coca-Cola focuses on iterating and getting things done, with success rates from innovation improving over time. Its revenue growth management strategy will focus on premiumization opportunities and affordability, such as using Aguas Frescas and Freestyle in North America and Schweppes and refillable bottles in Latin America.

Coca-Cola’s local and global portfolio will continue to drive growth and capture value, firmly aligning with international and local bottling partners. In addition, the company will leverage the system’s advantages in procurement and execution in the marketplace to save money and ensure continuity of supply. The company has a positive long-term outlook with momentum across its operating units. Its spirit of learning encourages experimentation to improve future decisions, and it has a methodical approach to investing, giving it confidence that investment dollars will generate greater returns.

Best Dividend Stocks: Procter & Gamble (PG)

Procter & Gamble (NYSE:PG) is a reliable and well-established company with a track record of 66 consecutive years of dividend growth, making it an attractive investment for those seeking a stable income. In addition, PG’s dividend yield (forward) of 2.49% is in line with the sector median of 2.60%, and its annual payout (forward) of $3.76, combined with a payout ratio of 63.33% and a five-year growth rate of 5.78%, makes it an excellent choice for long-term investors.

Despite facing challenges such as market pressure in Greater China, reduced portfolio in Russia, and trade inventory reductions, PG has had a solid start to the fiscal year, with organic sales up 6% in the first half. The company is committed to sustained growth and value creation through momentum across its portfolio, with all ten categories growing organic sales in the first half.

PG is focused on driving long-term growth and investment in its brands, even during challenging periods, recognizing that investing in the business’s health is critical to driving both volume and value growth. In addition, the company is investing in the superiority of its brands to deliver superior value, which is a combination of price, product performance, and usage experience, to earn consumer loyalty every day. PG is also driving productivity through constructive disruption and innovation, aiming to enable productivity savings of up to $1.5 billion per year and create a sustainable and expanding competitive advantage.

PG’s organizational structure yields a more empowered, agile, and accountable organization with little overlap or redundancy, driving execution through four integrated strategies: Supply Chain 3.0, digital acumen, environmental sustainability, and superior employee value equation. In addition, PG’s efforts in sustainability have enabled the reduction of plastic packaging and the use of recycled plastic, and superior innovation helps consumers reduce their environmental footprint. Finally, data and digitization enable PG to delight consumers and create shareholder value.

The company’s strategic choices of a diversified portfolio, superiority, productivity, constructive disruption, and organizational structure and culture have already delivered solid results and served the company well during volatile times. Moreover, by prioritizing long-term interests and growth over short-term challenges, PG takes a forward-looking approach that sets it apart as an excellent investment opportunity.

On the date of publication, Yiannis Zourmpanos did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.