The Top High-Dividend Stocks to Buy and Hold for Passive Income

Many investors—particularly retirees—rely on stock dividends as sources of passive income. “The major attraction with dividend-payers in retirement is the ‘bird in hand’ feature,” suggests Morningstar Director of Personal Finance and Retirement Planning Christine Benz. “Cashing a dividend check (or having dividends sent to your cash account) is simply easier than venturing into your portfolio to figure out what to sell.”

If you rely on dividend stocks for retirement income, be sure to focus on dividend security and price stability (or even better, appreciation potential), not just high dividend yields.

“Tempting as they might be, the stock market’s juiciest yields are often illusory,” explains Dan Lefkovitz, strategist for Morningstar Indexes. “High dividend yields are often found in risky sectors, industries, and companies.” As a result, investors in high dividend stocks may have to accept less reliable dividend payments and greater share-price volatility.

The 3 High-Dividend Stocks to Buy for Dependable Passive Income

From Morningstar’s perspective, we think these are three of the top dividend stocks for retirement. We think they offer the best of all worlds: high yields, appreciation potential, and dividend stability.

1. Clorox CLX
2. PepsiCo PEP
3. Realty Income O

Here’s more about each of these dependable dividend stocks to buy and hold. All data is as of July 24, 2026.

Clorox CLX

• Morningstar Rating for Stocks: 5 stars
• Forward Dividend Yield: 5.19%
• Dividend/Share: $1.24
• 5-Year Dividend/Share Growth: 1.70%
• Dividend Frequency: Quarterly

Clorox is the most undervalued stock on our list of dependable dividend stocks for the long term; shares are trading 38% below our $155 fair value estimate. This wide-moat company has faced a slew of challenges during the past several years, including postpandemic volume fatigue, rampant cost inflation, and a cybersecurity breach, says Morningstar director Erin Lash. Yet through it all, the company has continued to invest in consumer-oriented innovation, advertising, and its capabilities, which we think supports its competitive edge.

Clorox has also raised its dividend annually (albeit modestly) despite those challenges. In fact, Clorox is a dividend aristocrat, which means it has raised its dividend for 25 years or more. Lash expects mid-single-digit annual dividend growth over the next decade, resulting in a payout ratio of around 60% in the longer term.

Review Clorox’s dividend history.

PepsiCo PEP

• Morningstar Rating for Stocks: 4 stars
• Forward Dividend Yield: 4.33%
• Dividend/Share: $1.48
• 5-Year Dividend/Share Growth: 7.51%
• Dividend Frequency: Quarterly

Of the long-term dividend stocks for passive income here, Pepsi boasts the highest dividend-growth rate during the past five years. While this wide-moat company’s portfolio of beverage and snack brands has been facing headwinds owing to consumer belt-tightening and changing tastes toward healthier fare, we think the company’s efforts to improve its value proposition to consumers are starting to bear fruit, says Morningstar senior analyst Kris Inton.

Pepsi is a dividend king, which means it has raised its dividend for at least 50 consecutive years. Inton expects the company’s payout ratio to stabilize in the low 70s over the next decade, with the dividend payment growing at a mid-single-digit pace annually. The stock of this top dividend stock for dependable income is trading 19% below Morningstar’s $169 fair value estimate.

Review PepsiCo’s dividend history.

Realty Income O

• Morningstar Rating for Stocks: 4 stars
• Forward Dividend Yield: 4.96%
• Dividend/Share: $0.24
• 5-Year Dividend/Share Growth: 2.77%
• Dividend Frequency: Monthly

As a REIT, Realty Income is required to pay out 90% of its income as dividends to shareholders. Its long-term leases provide a reliable, albeit slow-growing, stream of rental income: “Its line of business and operating metrics make its dividend one of the most stable sources of income for investors,” says Morningstar senior analyst Kevin Brown.

Billing itself as “The Monthly Dividend Company,” this REIT has raised its dividend for more than 25 consecutive years, which qualifies it as a dividend aristocrat. Like most REITs, Realty Income is having a good year, but it’s still trading 9% below our $72 fair value estimate.

Review Realty Income’s dividend history.

High-Dividend Stock Compare: CLX vs. PEP vs. O

The Top High Dividend Stocks for Reliable Passive Income: How We Chose Them

To make our list, we focused on a few key traits.

• The stocks offer above-market dividend yields: We demanded 4% or more.
• The company’s stock is trading well below Morningstar’s
  fair value estimate
  . From where we sit, valuation matters even for investors using dividend stocks to generate regular income. We think trying to maximize total return, not just income, is the better strategy. So we focused our screen on high-dividend stocks with
  Morningstar Ratings
  of 4 or 5, which means we think they’re undervalued.
• Company management earns a
  Morningstar Capital Allocation Rating
  of Exemplary. This rating summarizes how well company leadership has managed its capital, reflecting how sound the balance sheet is, how effective investments in the company have been, and whether the company’s distributions are appropriate. By extension, a company with an Exemplary Capital Allocation Rating that prioritizes dividends should be able to deliver dividend stability.

Top 10 Dividend Stocks to Buy in 2026

Plus, how dividend stocks have performed so far this year.

26m 45s Jul 15, 2026

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Another Way to Invest in High-Dividend Stocks for Retirement

Exchange-traded funds investing in dividend-paying stocks can be simple one-stop solutions for those investors seeking reliable income, for a few reasons:

• Dividend ETFs maintain a portfolio of dividend stocks and thereby provide instant diversification.
• Dividend ETFs are, in general, low-cost.
• Dividend ETFs are easy to buy and sell; many of the best dividend ETFs are managed by popular asset managers with brokerage platforms.

Those investors who’d like to get exposure to dividend stocks through an ETF can find a list of good options in The Top High-Dividend ETFs for Passive Income.

How to Screen for More High-Dividend Stocks to Buy and Hold

Dividend-stock investors can use our Morningstar Investor Screener tool to find stocks with above-average dividend yields that offer reliable dividend income potential. To build your screen, include the following filters:

Dividend per share growth (10Y): Click the + Filter button on the left-hand side of the Screener, then search for the data point. Set the range you’d like to target, for example, greater than or equal to 5%, either by entering a figure or dragging the slider.

Dividend yield (trailing): Scroll to the bottom of the left-hand side of the Screener and set your range, for example, greater than or equal to 4%.

Morningstar Rating for Stocks: While not directly related to dividends, filtering to see only 4- or 5-star (undervalued) stocks helps you find overlooked dividend stocks with potential upside.

: Similarly, while moat isn’t directly tied to dividends, selecting stocks with a wide or narrow economic moat can identify companies with durable competitive advantages—and perhaps more secure dividend payments, too.

You can continue to use the + Filter button to further customize the screen according to criteria that matter to you.