2 Magnificent Dividend Stocks to Buy in June

Dividend stocks can be a great antidote to market volatility. While these stocks can still experience dips with the broader market, the regular cash deposits made into your account can help you stay optimistic about your financial future.

If you’re thinking about adding reliable dividend payers to your portfolio right now, here are two industry-leading businesses that could potentially pay you for the rest of your life.

1. Coca-Cola

Coca-Cola (KO 0.98%) is a staple brand for many households. While it doesn’t offer a lot of growth, the stock has held up relatively well against market volatility in recent years. It has an excellent dividend payment record and currently offers an attractive yield that is double the S&P 500 average.

At the current quarterly payout of $0.51, the stock’s forward dividend yield is 2.85%. The company just raised the quarterly payment for the 63rd consecutive year, indicating a resilient business through economic cycles.

Coca-Cola is more than its namesake brand. It owns dozens of brands across juices, tea, energy, and water, so it offers a beverage product for just about any consumer preference. Its product diversity also helps the business generate steady sales year to year. Despite economic uncertainty in the first quarter, Coca-Cola’s adjusted revenue grew 6% year over year, with unit case volume up 2%.

Tariffs could affect Coca-Cola’s financial results this year, but only marginally. Based on what management has seen so far, it expects adjusted earnings to increase 7% to 9% in 2025. Given its trailing 12-month payout ratio of 77%, more earnings growth should support further increases in the dividend.

This rate of growth is consistent with management’s long-term expectations. While Coca-Cola is a global brand, it still has significant opportunities in emerging markets, where people consume fewer commercial beverage products than in developed countries.

The company raised the dividend by 5% this year, and that’s a reasonable expectation for its long-term growth in revenue, earnings, and dividends. Coca-Cola stock has been a favorite holding of Warren Buffett for many years and can certainly help you grow your savings.

2. Home Depot

Home Depot (HD -0.03%) is the leading home improvement retailer. Favorable homeownership trends have driven rising demand for its services over the years. This has made the stock a rewarding investment. A $10,000 investment 20 years ago would be worth $151,000 today, including dividend reinvestment.

Home Depot has been a solid dividend payer, and it currently offers an attractive yield. Its quarterly payment currently stands at $2.30, bringing the forward dividend yield to an above-average 2.49%.

While the housing market can swing with the economy and interest rates, Home Depot has weathered these cycles well. The housing market has been relatively weak the past few years, but Home Depot has maintained steady sales and earnings. Over the past year, it paid out 61% of its earnings in dividends, providing plenty of wiggle room to sustain the dividend in a soft year.

Another quality that makes Home Depot a solid income investment is that its average customer earns an average annual income of $110,000, with 80% of its customers owning their home. This can explain why Home Depot reported healthy demand for small home projects last quarter, despite economic uncertainty. The company reported a slight increase in U.S. comparable store sales over the year-ago quarter.

Management expects full-year adjusted earnings to be down approximately 2% over fiscal 2024. But in the long term, investors can expect Home Depot to deliver respectable returns. The opportunity in the home improvement market is worth $1 trillion, which leaves a lot of room for growth for a business with annual sales of $162 billion.

Returns over the next 20 years will likely be more modest than in the previous few decades, but Home Depot has plenty of opportunities to grow sales and pay dividends for many years.