2 Top Dividend Stocks to Buy in 2026 and Hold for a Lifetime of Passive Income

Investing in companies with a long record of paying dividends is one of the easiest ways to achieve financial freedom. As long as you invest in companies that can grow their dividend over the long term, it's possible to build up enough annual income to cover living expenses in retirement.

Here are two quality dividend stocks to buy now. These rock-solid companies could pay you a growing stream of annual income for the rest of your life.

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1. Coca-Cola

Coca-Cola (NYSE: KO) owns 30 brands generating at least $1 billion in annual revenue. The stock offers an attractive yield to help you build up a nice stream of passive income.

For investors looking to reinvest their dividends, Coca-Cola offers solid dividend growth. The company has grown its quarterly dividend by 52% over the last 10 years. It announced its previous 5% increase at the end of 2024, so it should be its 64th consecutive annual dividend increase in the first quarter of 2026.

Despite recent weakness in consumer spending, Coca-Cola has paid out around two-thirds of its earnings over the last year in dividends. This low payout provides ample room for growth, allowing the dividend to continue increasing even during periods of soft demand.

Despite a challenging environment for sales, Coca-Cola still reported a 5% year-over-year increase in revenue for the third quarter. Management attributes the top-line growth to improvements in marketing and innovation. Recent new beverages, such as Sprite + Tea and Bacardi Mixed with Coca-Cola, have resonated with consumers across North America, Mexico, and Europe.

Coca-Cola is a simple business that generates stable revenue and profits by selling a product that is relatively inexpensive. At the current quarterly payment of $0.51, the stock offers an attractive dividend yield of 2.95%. However, investors can expect the forward yield to be slightly higher, as the company is likely to announce a slight increase for the next quarterly payment.

Image source: Home Depot.

2. Home Depot

With the Federal Reserve pivoting to cut interest rates, the housing market is expected to experience improvement over the next few years. This is the time to consider investing in Home Depot (NYSE: HD), which currently offers an above-average dividend yield.

The world's largest home improvement retailer has paid a dividend for 38 years. This is also an outstanding dividend growth stock. The dividend has increased by 288% over the last decade, and has grown at a rate of about 9% annually over the past five years.

Home Depot has seen some improvement in sales in recent quarters, with sales up 2.8% year over year in the third quarter. However, comparable store sales were barely in positive territory, growing by just 0.2%.

This weak sales growth reflects elevated interest rates compared to five years ago, which makes financing home projects more expensive. However, the recent sales increase demonstrates the business's resilience. Home Depot has navigated these housing cycles before, yet it has continued to deliver shareholder returns.

The prospect of lower interest rates in 2026 and improving economic conditions could spark growth in Home Depot's business. Management estimates there is as much as $50 billion in underspending for routine repairs and home remodeling. In other words, there is a significant amount of pent-up demand for a business that generates $166 billion in annual revenue.

Home Depot has paid out less than two-thirds of its earnings in dividends. The current quarterly dividend payment is $2.30, bringing the forward yield to 2.55%.

With a $1 trillion addressable market, there is a substantial opportunity for Home Depot to expand its business, which should lead to growing earnings and dividends for many years.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot. The Motley Fool has a disclosure policy.