7 Biggest US Dividend Stocks in 2026: A Passive Income Strategy for the Long Term!

Amidst uncertainty US stock market with the Shiller P/E reaching 41, the highest since the 1999 dot-com bubble, investors are increasingly looking for defensive stocks that offer reliable passive income.

Dividend Kings, a company that has raised its dividend for 50 consecutive years, is a top choice for its stability and long-term commitment to shareholders.

Morningstar recommends PepsiCo and S&P Global as two top dividend kings with wide economic moats and attractive valuations.

This article summarizes the 7 US stocks with the highest dividends in 2026 that are suitable for a long-term passive income strategy.

Key Points

• Dividend Kings, companies that have raised dividends for 50 consecutive years, with PepsiCo and S&P Global as top picks according to Morningstar.

• Defensive stocks like Coca-Cola, Hormel Foods, and Genuine Parts offer attractive dividend yields (2.6%-4.7%) at low valuations.

• Long-term dividend strategies focus on companies with wide economic moats, and prices below fair value, such as PepsiCo (15% discount) and S&P Global (21% discount).

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What are Dividend Kings and Why Are They Important?

Dividend Kings are S&P 500 companies that have increased their dividends for 50 consecutive years or more.

This is an elite group that is more exclusive than the Dividend Aristocrats (25 years in a row).

Morningstar emphasizes that companies with wide economic moats, which have a sustainable competitive advantage, are less likely to cut dividends than companies without moats.

To select the best dividend kings, Morningstar usesthree criteria: economic moat rating "wide", capital allocation rating "exemplary", and stock price below fair value estimate.

This approach ensures that investors not only get high yields but also potential capital appreciation.

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2 Best Dividend Kings Stocks from Morningstar

PepsiCo (PEP)

PepsiCo faces challenges from shifting consumer preferences toward healthier products, but Morningstar believes the company's strategy is starting to pay off.

With strong free cash flow and a solid balance sheet, PepsiCo has been able to survive macroeconomic volatility.

The payout ratio is expected to remain stable at around 70% with mid-single-digit dividend growth.

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S&P Global (SPGI)

S&P Global provides data and benchmarks for capital markets and is the world's largest credit rating agency.

Concerns about AI's impact on business are overblown by Morningstar, which instead sees AI as an opportunity to improve operating margins.

With a highly free cash flow generating business model and a target payout ratio of 20-30%, S&P Global offers long-term dividend security.

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5 Dividend Aristocrat Stocks with High Yields and Low Valuations

In addition to the Dividend Kings, the following five Dividend Aristocrats offer a combination of high dividend yields and low P/E, making them safe choices amidst an overvalued market:

1. Hormel Foods (HRL)

- Forward P/E: 13,07 | Dividend Yield: 4,7%

- Rating: Overweight (Barclays) | Target: $23

- Processed food company with 4.7% yield, diversified products under the Spam, Skippy, Planters, and Jennie-O brands.

2. Stanley Black & Decker (SWK)

- Forward P/E: 13,54 | Dividend Yield: 3,53%

- Rating: Buy (UBS) | Target: $98

- The world's largest tool company with the brands DeWalt, Craftsman, Black+Decker, and Cub Cadet.

3. Genuine Parts (GPC)

- Forward P/E: 11,77 | Dividend Yield: 3,9%

- Rating: Strong Buy (Raymond James) | Target: $145

- Automotive and industrial parts distributor with 69 consecutive years of dividend increases.

4. PepsiCo (PEP)

- Forward P/E: 16,92 | Dividend Yield: 4,08%

- Rating: Buy (Goldman Sachs) | Target: $183

- Food and beverage giant with a portfolio of Frito-Lay, Quaker, and Gatorade.

5. PPG Industries (PPG)

- Forward P/E: 12,83 | Dividend Yield: 2,30%

- Rating: Overweight (Wells Fargo) | Target: $130

- Paint and coating manufacturer with a dividend history since 1899.

Dividend King Stock That's Beating the S&P 500: Coca-Cola

Coca-Cola (KO) is a dividend king with 64 consecutive years of dividend increases and a yield of 2.6%.

The stock is up nearly 20% year-to-date, outperforming the S&P 500, which is up just 8%. Coca-Cola is showing strength amid a shift from overvalued AI stocks to defensive stocks.

With Q1 sales volume growing 3%, revenue up 10%, and profit margins widening, Coca-Cola offers dividend certainty in an uncertain market.

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Conclusion

Investing in large dividend stocks like Dividend Kings and Aristocrats offers a reliable passive income strategy for the long term.

PepsiCo, S&P Global, and Coca-Cola are top picks with strong economic moats and proven dividend commitments.

Meanwhile, Hormel Foods, Stanley Black & Decker, Genuine Parts, and PPG Industries offer high yields at low valuations.

With a high Shiller P/E, diversifying into these defensive stocks can provide security and income amid market uncertainty.

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FAQ

What is Dividend Kings?

Dividend Kings are companies that have raised dividends for 50 consecutive years or more, making them an elite group in the US stock market.

What is the difference between Dividend Kings and Dividend Aristocrats?

Dividend Aristocrats have increased their dividends for 25 years, while Dividend Kings have increased their dividends for 50 years. Kings are a more exclusive subset of Aristocrats.

Why is PepsiCo recommended as Dividend King?

PepsiCo has a wide economic moat, exemplary capital allocation, a 4.1% dividend yield, and is trading 15% below fair value according to Morningstar.

What are the advantages of S&P Global as a Dividend King?

S&P Global has a wide economic moat, a 21% discount to fair value, and a highly free cash flow-generating business model with a payout ratio of 20-30%.

Why are defensive stocks like Coca-Cola attractive in 2026?

Coca-Cola is up 20% year-to-date as investors shift from overvalued AI stock to defensive stocks with reliable dividends (2.6% yield).

What are the criteria for selecting the best Dividend Kings?

Economic moat rating "wide", capital allocation rating "exemplary", and price below fair value estimate (discount).