2 Top Dividend Stocks to Buy in August

Key Points

• Coca-Cola has been a steady performer and currently offers a yield close to 3%.

• Hershey is getting much needed cost relief from lower cocoa prices, while its yield is still very attractive.

• 10 stocks we like better than Coca-Cola ›

Companies that own strong brands that consumers buy every day can provide steady streams of passive income for a lifetime. There's nothing like receiving regular cash deposits in your account to cushion the occasional bouts of market volatility.

If you'd like to increase your passive income, here are two quality dividend stocks that currently offer twice the yield of the S&P 500.

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Image source: Getty Images.

1. Coca-Cola

Coca-Cola (NYSE: KO) is one of the top beverage companies in the world. People consume more than 2 billion servings of its products every day, which include brands like Simply, Minute Maid, Dasani, Sprite, Powerade, Schweppes, and many others along with its trademark Coca-Cola brand. The stock is up 12% year to date and offers an attractive forward dividend yield of 2.91%.

Despite economic challenges in certain geographies, Coca-Cola delivered solid organic (non-GAAP) revenue growth of 5% year over year in the first half of 2025. Adjusted earnings grew 7% year over year, as management continues to focus on expanding margins to grow profits faster than revenue.

Coca-Cola is a highly profitable business, generating $12 billion in net income on $47 billion of revenue over the past year. It has a sterling record of growing its dividend for 63 consecutive years. It has paid out more than two-thirds of its earnings in dividends in recent years, reflecting management's confidence in the company's ability to maintain consistently high margins.

But the company is not just dishing out dividends at the expense of investing for growth. Management is constantly making adjustments with marketing and other capabilities, such as new packaging and products, to stimulate demand in local markets globally. It's also using artificial intelligence tools to optimize pricing and get products to market faster.

"We're confident in our long-term free cash flow generation and have ample balance sheet capacity to pursue which prioritizes continuing to invest in our business and returning capital to our shareholders," CFO John Murphy said on the second-quarter earnings call.

Coca-Cola is truly one of the top dividend stocks to hold for the long term. It's not going make you rich overnight, but its strong brand and high volume sales will continue to produce very steady earnings and dividend payments for potentially decades to come.

Image source: Getty Images.

2. Hershey

Another grocery store staple to consider for its attractive yield is Hershey (NYSE: HSY), the maker of several snacks and candies, including Skinny Pop, Jolly Rancher, Reese's, Twizzlers, in addition to its namesake brand.

Hershey stock is down 35% from its previous high over historically high cocoa prices, a key cost component for its chocolate business. Higher cocoa prices have pressured the company's earnings, but this is also why investors can buy shares that offer a high forward yield of 3.08% at the current $178 share price.

Importantly, sales growth hasn't been the problem. The company's adjusted sales grew 0.4% in 2024 and holding up well through the first half of 2025. This is a cost issue based on cocoa prices going parabolic the past few years. The important thing is that sales are growing, with full-year sales expected to be up at least 2%. This indicates consumer demand is healthy, and Hershey's competitive advantage built on decades of brand recognition remains intact.

While Hershey is still struggling with the higher costs, which is expected to send adjusted earnings down at least 36% this year, management sees positive trends taking shape for 2026. In the Q2 earnings report, CEO Michele Buck stated, "Looking ahead, we remain committed to delivering balanced growth and have taken pivotal steps toward mitigating cocoa inflation through strategic pricing, enhanced productivity, and technology-enabled efficiency and speed."

Analysts anticipate a rebound in adjusted earnings next year and improving to $7.74 by 2027. Meanwhile, Hershey is still covering its quarterly dividend with free cash flow of $1.6 billion generated over the past year. It paid 65% of its free cash flow in dividends, translating to a quarterly payment of $1.37 per share.

Hershey hasn't raised its dividend in two years to deal with the higher costs, but the company should resume growing the dividend once costs stabilize. On that score, cocoa prices have come down 28% so far in 2025, which seems to be factored into Wall Street's expectation for a return to earnings growth in 2026. With the stock still offering a high yield, this is a good time to consider building a position in this top chocolate stock.

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