Key Points
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Coca-Cola’s evergreen business model is well-insulated from recessions.
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Altria’s smoke-free expansion will boost its long-term sales.
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Vici’s sticky multi-decade leases will generate plenty of stable income.
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Many blue chip dividend stocks pulled back this year after the Fed raised its benchmark rates for the first time in three years. That pressure forces issuers of other fixed-income investments to raise their yields, making dividend stocks less attractive for stability-seeking investors.
However, these rate-driven pullbacks have historically been a good time for long-term investors to buy some of the market’s most reliable income stocks. If you have $300 to spare, you should consider locking $100 into these three dividend stocks — Coca-Cola (NYSE: KO), Altria (NYSE: MO), and Vici Properties (NYSE: VICI) — and lose the key for the next few years.
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Coca-Cola
Coca-Cola, the world’s largest beverage maker, has raised its dividend for 64 consecutive years. That makes it a Dividend King because it’s raised its payout for at least 50 years.
Coca-Cola constantly updates its flagship sodas with new flavors, healthier versions, and smaller serving sizes to reach new customers. It also sells a wide range of non-carbonated drinks to offset declining soda consumption rates. It only sells its concentrates and syrups to its bottling partners, which produce and distribute the finished drinks.
That capital-light model enables Coca-Cola to maintain high margins and generate ample cash to fund its dividends. Its forward yield of 2.2% might seem unimpressive, but it spent only 79% of its free cash flow (FCF) on dividends over the past 12 months. Therefore, it has plenty of room to raise its dividend while generating stable returns for its long-term investors.
Altria
Another Dividend King is Altria, which has raised its dividends for 57 consecutive years. It’s the top tobacco company in the United States, and it owns Marlboro — the country’s top cigarette brand — as well as smaller cigarette brands, cigars, and smoke-free products.
To offset declining smoking rates in the U.S., Altria continually raises cigarette prices, cuts costs, and repurchases shares to grow its EPS even as revenue growth stagnates. It’s also expanding its smoke-free portfolio — which includes its NJOY e-cigarettes and On nicotine pouches — to generate at least $5 billion in smoke-free revenue by 2028. That goal would account for roughly a quarter of its projected sales and boost its top-line growth again.
Over the past 12 months, Altria spent 78% of its FCF on its dividends. It pays a forward yield of 5.8%, and it will remain a safe place to park your cash for the foreseeable future.
Vici Properties
Vici is an experiential real estate investment trust (REIT) that was spun off from Caesars Entertainment in 2017. It now owns 103 experiential assets across North America. Caesars and MGM Resorts account for about 70% of its rental income.
As an REIT, Vici rents out its properties and distributes at least 90% of its taxable income as dividends to maintain a lower tax rate. It’s maintained a perfect 100% occupancy rate ever since its 2018 IPO by locking its tenants into multi-decade leases. These leases are also pegged to the Consumer Price Index (CPI), so it can raise its rent to keep pace with inflation, and they’re bundled together so its tenants can’t break the lease on a single underperforming property.
Vici’s adjusted funds from operations (AFFO) per share have comfortably covered its dividends ever since its public debut, and it raised its dividend for the ninth consecutive year this September. For 2026, it expects its AFFO per share to rise to 2.47-$2.48, easily covering its forward dividend of $1.84 per share — which equals a forward yield of 7.4%. If you’re looking for an easy way to outperform most fixed income assets, Vici deserves a closer look.
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Leo Sun has positions in Altria Group, Coca-Cola, and Vici Properties. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.
