Key Points
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A saturated wireless market may limit Verizon’s net growth potential, but the telecom business is perfect for recurring dividend payments.
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Merck’s been positioning for renewed revenue growth — for investors that can look a decade down the road.
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Beverage company Coca-Cola remains a cash-generating juggernaut for the exact reason you’d expect.
- 10 stocks we like better than Verizon Communications ›
In light of the recent meltdown of most of the market’s top technology names, are boring ol’ dividend stocks suddenly much more attractive? For plenty of investors this now seems to be the case.
And if you’re going to start your search for greener pastures anywhere in particular, the blue chip names of the Dow Jones Industrial Average may be a great place to begin — and even end — the effort.
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With that as the backdrop, here’s a closer look at three of the Dow’s top dividend-paying prospects for 2026.
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1. Verizon
If you’re looking for just above-average price appreciation, forget it — Verizon Communications (NYSE: VZ) can’t offer it. The United States’ mobile phone market is highly saturated, and highly competitive. Last quarter’s year-over-year revenue growth of about 2% is about as good as it gets. Merely matching inflation here would be a reasonable expectation of this stock.
This ticker’s dividend, however, makes these slow-moving capital gains worth it. Newcomers will be plugging into this name while its forward-looking yield stands at 6.1%, which would be difficult to match with any other name that brings a comparable risk to the table.
The business itself is, of course, well-suited for supporting recurring dividend payments. Consumers may postpone the purchase of a new car or skip a vacation. But they’re not about to give up the device in their pocket or purse that keeps them connected to the rest of the world.
2. Merck
It would be naïve to pretend pharmaceutical giant Merck (NYSE: MRK) didn’t become a little too dependent on its cancer-fighting Keytruda (which now accounts for roughly half of its sales) knowing it was headed toward patent expiration beginning in 2028. It would also be disingenuous, however, to ignore the fact that the company’s been taking enormous strides in preparation for that day.
Much of this work comes in the form of acquisitions, like 2023’s $10.8 billion purchase of Prometheus Biosciences and October’s $10 billion deal for Verona Pharma. And just last month, it essentially sealed the deal on Cidara Therapeutics, to the tune of $9.2 billion.
These aren’t inexpensive additions to the drugmaker’s portfolio. They are well-reasoned ones, fitting into Merck’s overarching plans to dominate certain segments of the drug market.
More to the point for interested income-minded investors, the company expects all of these acquisitions to drive $70 billion worth of new revenue by the mid-2030s. Today’s buyers will be stepping into this rekindled potential while the stock’s projected dividend yield stands at 2.9%.
3. Coca-Cola
Finally, add beverage behemoth Coca-Cola (NYSE: KO) to your list of Dow dividend stocks to buy for passive income now and forever, while you can step into its forward-looking yield of 2.7%.
That’s not an enormous number. With 63 years of yearly dividend increases under its belt, however — and soon to be 64 — it’s arguable this name may well be the king of all dividend payers.
The reason for the reliable payout growth is pretty obvious. That is, consumers are quite brand-loyal when it comes to relatively inexpensive and simple things they enjoy over and over again. The Coca-Cola Company is of course second to none when it comes to brand-building marketing.
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James Brumley has positions in Coca-Cola. The Motley Fool has positions in and recommends Merck. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
