My 2 Favorite Stocks to Buy Right Now

Key Points

• Regardless of overall market conditions, good stocks can be had for investors who look diligently.

• Taiwan Semiconductor is the leading chip foundry and has doubled its revenue over the past five years.

• Beverage behemoth Coca-Cola is a Dividend King with 63 consecutive years of payout increases.

• 10 stocks we like better than Taiwan Semiconductor Manufacturing ›

One thing about stock investing is that there are opportunities for everyone, no matter your goals, time horizon, or risk tolerance. Looking for passive income? There's a stock for that. Looking for consistent growth over time? There's a stock for that. Want to take your shot at the Next Big Thing? There's a stock for that, too.

The Motley Fool recommends buying and holding around 25 stocks over time, but that doesn't mean you have to like them all equally. Different stocks will serve different purposes. Two stocks in particular are my favorite buys right now. One is dividend-focused, and one is a good mix of income and growth.

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 »

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1. Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing (NYSE: TSM) (TSMC) is, in my opinion, the unsung hero of the tech industry. It doesn't receive the same attention as other big tech stocks (especially the "Magnificent Seven" stocks), but it's just as important in many cases.

TSMC manufactures many of the semiconductors (chips) that you find in everyday electronics, including smartphones, laptops, electric vehicles, gaming consoles, data centers, and many others.

Companies will design the chips needed for their specific products, and then take the idea to TSMC to bring it to life with their advanced manufacturing processes and facilities. It's a business model that has set TSMC far ahead of the competition, with no signs of any of them catching up anytime soon.

As of the first quarter of 2025, TSMC had a 35.3% market share in the global foundry industry (by revenue), according to Counterpoint Research. The next closest was Intel, with 6.5%. This dominance for TSMC has paid off, cementing it as one of the world's top 100 revenue-generating public companies (based on the last four quarters).

Its revenue has more than doubled over the past five years, which isn't an easy feat for a company of its size.

TSM Revenue (Quarterly) data by YCharts

TSMC plays a crucial role in the tech ecosystem, and its manufacturing capabilities far exceed those of its competitors, making it the go-to for chip manufacturing. This provides a competitive advantage that helps ensure its continued growth and longevity.

Add in TSMC's dividend (albeit low with a roughly 1.2% average yield over the past 12 months), and its stock is a chance for a two-for-one with growth and income.

2. Coca-Cola

Although the dividend is a nice-to-have benefit with TSMC's stock, it's the main reason most investors likely flock to Coca-Cola's (NYSE: KO) stock. Even so, Coca-Cola's stock has outperformed the S&P 500 index so far this year, gaining 13.8% compared to the index's 5.8% through July 7.

There are always a few question marks surrounding the U.S. economy, but this year the uncertainty has been heightened by reactions to the Trump administration's tariff plans, the lack of consensus on interest rate cut timelines, and the newly passed "big, beautiful bill." That has pushed investors toward more "stable" and "defensive" stocks like Coca-Cola.

With Coca-Cola, investors know they're getting consistency, which is why it's one of my favorite stocks right now. We can't predict how the stock price will perform, but investors can be sure that the dividend will continue flowing, regardless of what's happening in the economy. The beverage giant has managed to increase its annual dividend for 63 consecutive years, earning it the title of Dividend King.

In 2024, Coca-Cola made a $6 billion IRS tax-litigation deposit, bringing its free cash flow down to $4.7 billion. However, excluding that amount, its free cash flow would've been $10.8 billion, which was more than enough to cover the $8.4 billion it paid out in dividends. Investors should have no concerns about Coca-Cola's dividend stability.

KO Free Cash Flow (Annual) data by YCharts. Negative numbers indicate the amount paid out in dividends.

Coca-Cola is in a great position because its products tend to sell regardless of the economy. Consumers are much more likely to cut back on eating out, buying electronics, or taking vacations than they are on buying their favorite soda, water, or tea.

Rarely can you go wrong with investing in blue-chip stocks like Coca-Cola because they're high-quality businesses that have stood the test of time. You might not see the high growth that we've seen from some larger tech stocks, but you know you're getting a reliable and resilient business.

Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?

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Stefon Walters has positions in Coca-Cola and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.