Investing in dividend stocks is a great way to generate passive income. Many companies pay generous and steadily growing dividends. This allows investors to earn increasing amounts of passive income.
Chevron (NYSE: CVX), NNN REIT (NYSE: NNN)and Verizon (NYSE: VZ) are the three top dividend stocks. Here’s why they’re a great option to buy this December to help you get a head start passive income 2026.
Chevron The current quarterly dividend paid is $1.71 per share ($6.84 annualized). At the current share price, the oil giant’s yield is 4.6%, which is roughly three times the company’s yield. S&P 500 Indexdividend yield (1.2%). Chevron has increased its dividend for 38 consecutive years, the second-longest streak in the oil industry.
The company’s high-yielding dividend is built on a very sustainable basis. Chevron is one of the lowest upstream The oil industry’s break-even level. It only needs oil averaging around $50 a barrel to fund its dividend and capital spending plans. This allows Chevron to generate a large number of Free cash flow, even with lower oil prices (crude oil prices are currently around $60). Additionally, it has one of the strongest balance sheets in the industry.
Chevron’s already strong free cash flow is expected to grow significantly over the next five years. The company recently completed the acquisition of Hess and is making organic capital investments to expand its global presence, should fuel By 2030, the compound annual growth rate of free cash flow will exceed 10%. This should provide Chevron with plenty of incentive to continue growing its dividend.
NNN REIT pays a quarterly dividend of $0.60 per share ($2.40 annualized). At this rate, real estate investment trusts (REIT) There is one 5.9% yield. Landlord has increased its dividend for 36 consecutive years, the third-longest streak in the REIT industry.
REITs have a simple business model. It invests in independent retail properties secured by long-term, triple net leases (neural network). NNN leases generate very stable rental income because the tenant bears all property operating costs, including ongoing maintenance, real estate taxes, and building insurance.
NNN REIT pays out a conservative proportion of its stable cash flow in the form of dividends (~70% of adjusted cash flow) FFO). This allows it to retain some cash to fund new income-producing real estate investments. REITs also have very conservative balance sheets, giving them additional financial flexibility when making new investments. A steady stream of new investments allows NNN REIT to continue growing its dividend.
