3 Top U.S. Stocks to Buy for Fast-Growing Passive Income

Investors looking to add some passive income to their portfolios should have these three dividend stocks on their watch lists.

| More on:
grow money, wealth build

Image source: Getty Images

It’s not easy to make the case that volatility in the stock market will slow down anytime soon. There’s still plenty of uncertainty in the short-term future of the economy, which is exactly what investors hate most. Whether it’s rising interest rates or geopolitical concerns, there are more reasons than one to believe there will be more pain in the short term for investors. 

The market’s turbulent performance over the past year has reminded me of a few key investing lessons. One of which is that not all stocks are meant to be owned solely for growth reasons. You might be investing in a company for the diversification it will provide for your portfolio. Another reason could be to generate a stream of passive income.

With market volatility looking like it’s here to stay, thinking of building an additional source of income wouldn’t be a bad idea. That’s exactly why I’m looking to add a few dividend stocks to my portfolio this month. 

Here are three top U.S. dividend stocks at the top of my watch list right now.


There’s not a whole lot to get excited about with the home improvement market. In fact, all three dividend stocks on my list are far from what you’d call exciting companies. However, when it comes to passive income, dependability goes a long way.

A dividend yield of 2.25% isn’t anything to write home about. But what is impressive is Lowe’s (NYSE:LOW) commitment to increasing its dividend. The home improvement stock has raised its dividend every year for more than 50 consecutive years, granting it Dividend King status.

In addition to passive income, Lowe’s is no stranger to delivering market-beating returns. Shares are up more than 125% over the past five years. And that’s not even including dividends, either.

Coca-Cola Company

The nearly $250 billion company, Coca-Cola Company (NYSE:KO), is as dependable a dividend stock as you’ll find. The global beverage and snacks company has held a market-leading position for decades. And in rough market periods like these, it’s well-run companies like Coca-Cola that are able to thrive.

Just like Lowe’s, Coca-Cola has increased its dividend payout for more than 50 consecutive years. At today’s stock price, the Dividend King is yielding more than 3%.

Good luck trying to find another U.S. dividend stock yielding 3% that can match that type of payout streak.


The last pick on this list sacrifices dependability and growth for a high yield.

At today’s stock price, Verizon’s (NYSE:VZ) dividend yield is close to a whopping 7%. For a company that’s increased its dividend for 15 consecutive years, a 7% yield is hard to ignore. 

What’s also hard to ignore is the stock’s performance in recent years. Shares are trading at a loss of 20% over the past five years, while the S&P 500 has returned more than 40%. 

If you’re looking for passive income in the short term, Verizon is a solid choice. But if you’re instead in search of a dividend stock to hold for decades to come, you may be better off investing in one of the first two picks I reviewed.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nicholas Dobroruka has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

analyze data
Dividend Stocks

Telus Stock Rose 1% in November: Is it a Buy Today?

After a mostly flat November, is Telus one of the best stocks to buy in December, as we head into…

Read more »

money cash dividends
Dividend Stocks

How to Generate $500 in Passive Income Each Month

Instead of letting the stock market control your earnings, take control. Earn stable passive income with this strategy.

Read more »

Dividend Stocks

2 of the Best Stocks to Buy for Fast-Growing Passive Income 

In this economy, you need a passive income that grows fast enough to beat inflation in any situation. These two…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

2 Top TSX Stocks to Buy Now for Passive Income

These top TSX stocks are industry leaders and have good track records of dividend growth.

Read more »

clock time
Dividend Stocks

2 Dividend Stocks to Set and Forget

I guarantee you haven't considered these dividend stocks as ones you can set and forget for decades, for a massive…

Read more »

Target. Stand out from the crowd
Dividend Stocks

1 Oversold Dividend Stock (With a 10% Yield) I’d Buy This December

Fiera Capital is a quality TSX stock that pays investors a handsome dividend yield. Here's why this TSX dividend stock…

Read more »

data analyze research
Dividend Stocks

3 Unstoppable Canadian Dividend Stocks to Buy Before 2023

These three dividend stocks have soundly beaten the TSX in 2022. Here's why they could continue to outperform in 2023.

Read more »

Golden crown on a red velvet background
Dividend Stocks

3 Underrated Dividend Stocks That Are Aristocrats in the Making

These three dividend stocks may not be Dividend Aristocrats yet, but it is highly likely they will be given their…

Read more »