5 Top-Quality Dividend Stocks for Passive Income

In the wake of the Fed's post-meeting press conference today - where Chair Jerome Powell indicated a March rate cut may be unlikely - fed funds futures are now pricing in a relatively tepid 59.1% probability of a rate cut during the May meeting, according to the CME FedWatch tool. While the initial reaction in markets is showing some disappointment, an eventual easing of interest rates still seems likely this year as economic indicators continue to show resilience.

That would be good news for dividend stocks, which underperformed last year as unusually high interest rates, coupled with surging bond yields, made other assets look more attractive to yield-hungry investors. And for market participants looking to deploy their capital this election year, investing in dividend stocks can provide a measure of relative stability, as compared to more speculative growth stocks.

Against this backdrop, here are 5 top-quality companies that have consistently upped their dividends for years - all backed by a long and robust operational history, and with bullish consensus ratings from the wider analyst community.

1. Coca-Cola Stock

Founded in Atlanta in 1886, Coca-Cola (KO) has gone on to become one of the most iconic and recognizable beverage brands in the world. It manufactures and distributes carbonated soft drinks, fruit juices, bottled water, sports drinks, energy drinks, coffee, and tea. Some of its most popular brands include Coca-Cola, Fanta, Sprite, Dasani, Minute Maid, Powerade, Monster Energy, Costa Coffee, and Fuze Tea. KO currently commands a mammoth market cap of $258.97 billion.

Coca-Cola stock is down 1.7% over the past year.

Coca-Cola is a “Dividend King,” meaning the company has raised its dividend each year for 50 or more consecutive years - 61 years, to be precise. Moreover, KO's dividend yield of 3.08% is above the sector median of 2.71%.

Overall, analysts have a consensus rating of “Strong Buy” on KO stock, with a mean target price of $65.94 - which indicates an upside potential of about 11% from current levels. Out of 16 analysts covering the stock, 11 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, and 4 have a “Hold” rating.

2. Reinsurance Group of America Stock

Engaged in the business of global life and health reinsurance, Reinsurance Group of America (RGA) has been around since 1973. With assets under management of close to $87.4 billion, it is the only international company to focus primarily on life and health-related reinsurance. Its market cap currently stands at $11.3 billion.

RGA stock is up 17% over the past year, and its dividend yield stands at 1.97%. That payout is backed by 15 years of dividend hikes - and with a payout ratio of just about 18%, there's plenty of headroom for further growth in dividends.

Analysts have a consensus rating of “Strong Buy” for RGA stock, with a mean target price of $177.54. This indicates an upside potential of about 1.7% from current levels. Out of 12 analysts covering the stock, 8 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, and 3 have a “Hold” rating.

3. Procter & Gamble Stock

Founded in 1837, Procter & Gamble (PG) is synonymous with a wide range of consumer goods globally. Its primary focus areas are beauty (Pantene, Olay), grooming (Gillette, Braun), healthcare (Oral-B, Pampers, Always), fabric and home care (Tide, Dawn, Febreze) and family care (Bounce, Bounty). Its market cap currently stands at a mammoth $370.57 billion.

PG stock is up just over 11% for the past 52 weeks.

PG's dividend yield of 2.39% isn't the highest, but it's remarkably consistent, backed by over 60 years of growth - placing the stock in “Dividend King” territory. The payout ratio of 58% indicates there's room for the dividend to keep growing, particularly given the company's solid cash position.

Overall, analysts have deemed PG stock a “Moderate Buy,” with a mean target price of $167.53. This indicates expected upside potential of about 6.5% from current levels. Out of 19 analysts covering the stock, 11 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating, and 6 have a “Hold” rating.

4. Restaurant Brands Stock

Formed by the merger of Burger King and Tim Hortons in 2014, Restaurant Brands International (QSR) is a multinational fast-food holding company headquartered in Toronto. Its flagship brands include Burger King, known for its flame-grilled burgers; Tim Hortons, a Canada-based coffee and quick-service restaurant chain; and Popeyes, famous for its Southern-style fried chicken. Its market cap currently stands at $24.6 billion.

Restaurant Brands stock is up 17.3% over the past year. 

At current levels, QSR offers shareholders a dividend yield of 2.8%, which edges out the consumer discretionary sector median. The company has increased its dividend for eight consecutive years.

Analysts have a consensus rating of “Moderate Buy” for QSR stock, with a mean target price of $80.58. This indicates an upside potential of roughly 3.6% from current levels. Out of 27 analysts covering the stock, 14 have a “Strong Buy” rating, 1 has a “Moderate Buy" rating, 11 have a “Hold” rating, and 1 has a “Moderate Sell” rating.

5. Cincinnati Financial Stock

Founded in 1851, Cincinnati Financial (CINF) provides property and casualty insurance for businesses and individuals, primarily in the Midwest and Mid-Atlantic regions. Its products are spread across commercial, personal and specialty lines. Its market cap currently stands at about $17.6 billion.

Cincinnati Financial shares are virtually unchanged over the last 52 weeks, though they've gained ground in 2024 so far.

CINF is a Dividend King, with over 60 years of consecutive dividend growth. Cincinnati Financial's dividend yield of 2.89%, with a payout ratio of about 58% - leaving scope for future growth in dividends.

Overall, analysts have deemed CINF stock to be a “Moderate Buy,” with a mean target price of $118. This indicates an upside potential of about 6.5% from current levels. Out of 9 analysts covering the stock, 2 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, and 6 have a “Hold” rating.