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Boost Your Passive Income in 2026: 3 Dividend-Rich Stocks to Add to Your Portfolio This December
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Published in Stocks and Investing on Wednesday, December 3rd 2025 at 23:08 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Boost Your Passive Income in 2026: 3 Dividend‑Rich Stocks to Add to Your Portfolio This December
If you’ve been watching the market for a while, you’ll know that dividend investing is a tried‑and‑true way to build steady passive income. Rather than chasing short‑term price swings, dividend‑focused investors bank on the cash flows that companies return to shareholders—often year after year, sometimes even on a quarterly basis. For those looking to shore up their 2026 income stream, a December buying strategy can be a smart move: many companies pay out year‑end bonuses, lock in yields before holiday season earnings, and you can lock in the current price for the next dividend cycle. Below, we distill the key takeaways from the MSN Money feature “3 Top Dividend Stocks to Buy in December to Boost Your Passive Income in 2026” and add extra context from linked articles to help you make a fully informed decision.
1. Johnson & Johnson (JNJ)
| Metric | Value |
|---|---|
| Current Yield | ~2.5 % |
| Payout Ratio | 62 % |
| Annual Dividend Growth | 5.1 % (last 10 years) |
| Sector | Healthcare / Consumer Health |
Why JNJ?
Johnson & Johnson is a classic dividend aristocrat—one of the few companies that has increased its dividend for more than 50 consecutive years. The article highlights JNJ’s stability: its diversified product mix—from pharmaceuticals to medical devices to consumer health products—insulates it from economic swings. Even in a downturn, the company’s robust cash flow keeps dividends on track. The 2.5 % yield may look modest compared to high‑yield utilities, but when you add the compound growth of dividends, the real return over the next decade becomes compelling.
What the article notes
The feature points out that JNJ’s most recent earnings report showed a 4 % increase in net sales, reinforcing the company’s capacity to continue raising dividends. Also, the linked “Dividend Aristocrats: What They’re and Why They Matter” piece explains that investing in these firms provides a safety net because they have a proven track record of dividend resilience.
2. Procter & Gamble (PG)
| Metric | Value |
|---|---|
| Current Yield | ~2.7 % |
| Payout Ratio | 58 % |
| Annual Dividend Growth | 4.8 % (last 10 years) |
| Sector | Consumer Staples |
Why PG?
Procter & Gamble (PG) is another dividend stalwart, celebrated for its “Everyday Value” products—think Tide, Gillette, and Pampers. The article explains that PG’s high brand equity and global footprint mean it can maintain earnings even when discretionary spending dips. In addition, PG’s 58 % payout ratio signals that the company keeps a generous buffer in earnings before committing to dividends, reducing the risk of a dividend cut.
What the article notes
A key detail is PG’s commitment to a “sustainable dividend policy.” The writer cites the company’s 2024 earnings release, where management emphasized a “commitment to maintaining a healthy payout ratio even in challenging markets.” Moreover, the MSN Money link to “How Dividend Growth Investing Beats Growth Investing” underscores PG’s consistent dividend growth as a hallmark of long‑term value creation.
3. Chevron (CVX)
| Metric | Value |
|---|---|
| Current Yield | ~4.8 % |
| Payout Ratio | 85 % |
| Annual Dividend Growth | 3.3 % (last 10 years) |
| Sector | Energy |
Why Chevron?
Chevron offers a higher yield than the other two, reflecting the energy sector’s cyclical nature. The article acknowledges that while oil and gas are subject to commodity swings, Chevron’s integrated operations—from upstream exploration to downstream refining—provide a more balanced risk profile. An 85 % payout ratio means the company is aggressively returning cash to shareholders, but its large cash reserves and disciplined capital allocation policy help guard against dividend erosion.
What the article notes
Chevron’s recent dividend hike, driven by a surge in oil prices, is highlighted as a case study in the “dividend growth strategy” mentioned in the linked “Energy Stocks with High Dividend Yields” article. Chevron’s dividend growth rate is modest, yet the higher yield offers a larger base for compounding returns. The feature also mentions the potential tax implications of energy dividends and suggests consulting a tax advisor for specifics.
How December Buying Helps
The article points out a few compelling reasons to buy in December:
- Price Lock‑In: Stock prices often dip a few weeks before the year‑end due to tax‑loss harvesting, allowing you to buy at a lower price.
- Reinvestment Advantage: Buying at the end of the year gives you two full months of dividends before the next reinvestment cycle.
- Calendar Effects: Some investors see a “January Effect” where markets rally after the holiday lull, giving early year gains a chance to accumulate.
Putting It All Together
Diversification is Key
While JNJ, PG, and CVX represent solid choices across healthcare, consumer staples, and energy, the article wisely reminds readers that a diversified dividend portfolio reduces sector‑specific risks. Consider pairing these stocks with a dividend‑focusing ETF (e.g., Vanguard’s Dividend Appreciation ETF – VIG) to broaden exposure.
Reinvest and Compound
Reinvesting dividends via a Dividend Reinvestment Plan (DRIP) turns each payment into a new share, accelerating compounding. The linked “Dividend Reinvestment vs. Cash Dividend” article explains how even modest yields can grow significantly over a 15‑year horizon when dividends are reinvested.
Watch for Payout Ratio Swings
High payout ratios are tempting but can signal potential cuts if earnings falter. Keep an eye on earnings reports and watch for changes in payout policies. The MSN Money link to “What a Payout Ratio Tells You About Dividend Stability” is a handy resource for assessing this metric.
Tax Considerations
Dividend income is taxed differently depending on its type (qualified vs. ordinary). The article’s “Tax‑Efficient Dividend Investing” section encourages setting up a tax‑advantaged account (IRA, Roth IRA) for dividend reinvestments to defer or eliminate taxes on growth.
Final Takeaway
If your goal is to build a reliable passive income stream that will carry through 2026 and beyond, a December purchase of dividend stalwarts like Johnson & Johnson, Procter & Gamble, and Chevron can be a powerful strategy. These companies combine a track record of steady dividend growth, manageable payout ratios, and solid earnings bases across diverse sectors. By buying in December, locking in current yields, and reinvesting dividends, you position yourself to enjoy both immediate cash flow and long‑term compounding—making your passive income dreams a more tangible reality.
Sources & Further Reading
- MSN Money: “3 Top Dividend Stocks to Buy in December to Boost Your Passive Income in 2026”
- MSN Money: “Dividend Aristocrats: What They’re and Why They Matter”
- MSN Money: “How Dividend Growth Investing Beats Growth Investing”
- MSN Money: “Energy Stocks with High Dividend Yields”
- MSN Money: “What a Payout Ratio Tells You About Dividend Stability”
- MSN Money: “Dividend Reinvestment vs. Cash Dividend”
- MSN Money: “Tax‑Efficient Dividend Investing”
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Read the Full The Motley Fool Article at:
[ https://www.msn.com/en-us/money/topstocks/3-top-dividend-stocks-to-buy-in-december-to-boost-your-passive-income-in-2026/ar-AA1REkdo ]
