3 Dividend Stocks Perfect for Millennial Investors

Key Points

• Coca-Cola’s products are reliably marketable in any environment.

• The migration of generative AI from the cloud to mobile devices bodes well for Qualcomm.

• Now with access to its own payment network, Capital One is well-positioned to apply growth-driving leverage.

• 10 stocks we like better than Coca-Cola ›

Are you currently between the ages of 30 and 45? In other words, are you a millennial? If so, you're at a busy time in your life. In addition to turning a job into a career, any kids you have are probably school-aged. You may be a homeowner as well, which can also require time and effort.

Just don't forget to start tucking away some more serious money for retirement while you've likely got enough income to do so. You've still got plenty of time to grow a nice nest egg, but time seems to start passing much more quickly from here.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

The good news is, many of you are saving. As the Motley Fool's own in-house research points out, however, you're investing much more of your money in growth stocks than dividend stocks. This is understandable -- you need growth much more than you need income right now. But with retirement at least in sight, it wouldn't be wrong to start shifting at least some more of your portfolio to holdings that are a bit more predictable.

Image source: Getty Images.

To this end, here's a closer look at three dividend stocks that are ideal for millennials, not because they're producing a ton of income right now, but because they offer an outstanding combination of dividend growth as well as potential for long-term capital appreciation. You may even decide to stick with all of them even after you retire.

1. Coca-Cola

It's such a commonly suggested dividend stock pick that it's almost become a cliché. Nevertheless, beverage giant Coca-Cola (NYSE: KO) is arguably one of the very best consumer goods investments due to its diverse product portfolio and the company's proven ability to market these products.

Yes, Coca-Cola is parent to the world's most favorite soda of the same name. It's so much more, though. In addition to Coke, this company is parent to carbonated beverages like Sprite and Barq's root beer, but also Gold Peak tea and Powerade sports drink. Minute Maid juices, Dasani water, and Glaceau's Smartwater and Vitaminwater are also part of the Coca-Cola family, along with more than a dozen other brand names. It's got something to suit consumers' ever-changing preferences.

Moreover, it's got the marketing muscle to keep these products at the top of consumers' minds. The Coca-Cola Company's sheer size may give it an unfair advantage over its rivals in this regard, in fact. But investors don't want a fair fight. They want to own companies that can dominate, and continue to thrive even in tough economic environments. That's this company to be sure.

Of course, it doesn't hurt the bullish case that packaged beverages are often purchased out of habit, and are reliably seen as being affordable even if consumers are cutting back their spending in other areas.

And the company's long-term results say as much. Not only has Coca-Cola paid a quarterly dividend like clockwork for decades now, but has raised its annualized payout every year for the past 63 years. That streak isn't apt to end anytime soon either, if ever. That's why this is a name that could easily turn into a "forever" holding.

Newcomers would be plugging into this ticker while its forward-looking dividend yield stands at just under 3%, by the way. Not bad.

2. Qualcomm

Yes, technology company Qualcomm (NASDAQ: QCOM) pays a dividend. Not a huge one, mind you; you can certainly find higher yields than its forward-looking dividend yield of 2.2%.

Income isn't necessarily your immediate goal here, though. Dividends are only a way of curbing some of your immediate volatility, and perhaps to establish a position that will grow into a meaningful source of dividend income in the distant future.

Just don't tarry too long if you'd like to own a piece of one of the market's few technology stocks that also pays a decent dividend. See, the next few years could be huge for Qualcomm due to artificial intelligence's ongoing evolution.

Anyone keeping their finger on the pulse of the AI movement likely knows Qualcomm hasn't featured prominently within it. In fact, it's been conspicuously left out of most of it. Names like Nvidia and Palantir have been its linchpins.

Qualcomm hasn't simply been sitting idle all this time, though. In fact, it developed a mobile processor capable of handling onboard artificial intelligence workloads before Apple released its Apple Intelligence app for the iPhone 15 (and newer) devices late last year. Qualcomm's AI-capable Snapdragon X Elite processor unveiled in 2023 was actually purpose-built to turn laptops into mobile stand-alone generative AI devices.

And it delivered. That first iteration released in 2024 could handle up to 13 billion different parameters from the device itself rather than punting this computing work to the cloud, which at the time was more than four times faster than any competing option. Since then, Qualcomm's AI-capable Snapdragon has seen some considerable improvements, which is why -- if you look closely -- you'll quietly find this processor already in a few laptops including several Microsoft Surface laptops as well as a handful of Samsung smartphones.

It doesn't matter much now. As their cost comes down while consumer expectations of mobile AI go up, however, Global Market Insights believes the mobile artificial intelligence industry is set to grow at an average yearly pace of more than 25% through 2034. Qualcomm is perfectly positioned to capitalize on this growth, and dish out decent dividends while it does.

3. Capital One

Finally, millennials might want to add Capital One (NYSE: COF) to their list of ideal dividend stocks to buy and hold indefinitely.

On the surface it doesn't necessarily seem like a must-have name. Its forward-looking dividend yield is a mere 1.1%, and slow-growth credit cards are a dime a dozen, so to speak. There's nothing especially special about this one.

Except, maybe there is.

As a reminder, Capital One recently completed its acquisition of rival Discover. On the surface it doesn't mean much. Under the proverbial hood, however, it means a great deal. With this acquisition, one of the world's bigger credit card issuers also now owns a payment network in the same vein as Visa or Mastercard. Discover's payment network is still tiny compared to Mastercard or Visa, to be clear, with Capital One itself reporting Discover's share of the U.S. payment processing market is a mere 2%, and only 1% on a global basis. That's not a bad thing, though. It sets the stage for significant growth from the new-and-improved Capital One.

See, Capital One accounts for roughly one-10th of all U.S. card-based spending, giving the company some meaningful leverage when it asks merchants to add Discover's payment network to their card-based payment options. And in that Capital One and Discover are now one and the same, the two can share costs or offer more attractive terms to merchants that accept card payments. Even modest further penetration of the payment network market would be meaningful, too.

Of course, Capital One almost certainly intends to promote its banking services to Discover's cardholders.

Still, a dividend yield of barely more than 1%? Consider this: Although the company doesn't raise it every year (and even reduced it during and because of the COVID-19 pandemic), the current quarterly per-share payment of $0.60 is 50% more than the payout from 10 years ago, and 60% better than its per-share payments from 15 years ago when the company got serious about paying dividends. The stock's also nearly tripled in price during this time, boosted by healthy stock buybacks. So, patient investors are being well rewarded here. That's not likely to change in the near or distant future either, particularly now that the company's equipped to become a true industry disruptor.

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James Brumley has positions in Coca-Cola. The Motley Fool has positions in and recommends Apple, Mastercard, Microsoft, Nvidia, Palantir Technologies, Qualcomm, and Visa. The Motley Fool recommends Capital One Financial and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.