Investing in dividend stocks is a great way to generate passive income. Many companies pay profitable and growing dividends. This allows investors to collect a growing stream of passive income.
Chevron(NYSE: CVX), NNN REIT(NYSE: NNN)and Verizon(NYSE: VZ) there are three from the top shares with dividends. Here’s why they’re great to buy in December to get a head start on your growth passive income in 2026.
Image source: Verizon.
Chevron it currently pays a quarterly dividend of $1.71 per share ($6.84 annualized). That gives the oil giant a yield of 4.6% at its current share price, roughly triple its S&P 500its dividend yield (1.2%). Chevron has increased its dividend payout for 38 consecutive years, the second-longest streak in the oil sector.
The company’s high-yield payout is based on a very sustainable foundation. Chevron has one of the lowest upstream profitability levels in the oil sector. It just needs oil to average around $50 a barrel to fund its dividend program and capital spending. That allows Chevron produces a lot of free cash flow, even at lower oil prices (crude is currently at $60). In addition, it has one of the strongest balance sheets in the industry.
Chevron’s already robust free cash flow is on track to grow significantly over the next five years. The company’s recently completed acquisition of Hess, along with organic capital investments to expand its global operations, should feed a Over 10% compound annual growth in free cash flow through 2030. This should provide Chevron with enough fuel to continue raising its dividend.
NNN REIT pays a quarterly dividend of $0.60 per share ($2.40 annually). At this rate, the real estate investment trust (REIT) has a 5.9% Yield. The owner has increased its dividend for 36 consecutive years, the third-longest streak in the REIT sector.
The REIT has a simple business model. Invest in freestanding retail properties secured by long-term, triple net leases (NNN). NNN leases produce very stable rental income because tenants cover all costs of running the property, including routine maintenance, property taxes and building insurance.
NNN REIT pays a conservative percentage of its stable cash flow in dividends (about 70% of FFO). This allows it to retain some of the cash to fund new income-generating real estate investments. The REIT also has a very conservative balance sheet, giving it additional financial flexibility to make new investments. A steady stream of new investments allows NNN REIT to continue to increase its dividend.
Verizon recently increased its quarterly dividend payment to $0.69 per share ($2.68 annually). It extended its dividend increase streak to 19 years in a row. At its new dividend rate, Verizon’s dividend yields 6.8%.
The telecom giant generates a huge amount of recurring cash flow as consumers pay their wireless and internet bills. In the third quarter, Verizon generated more than $7 billion in excess free cash after financing THE capital expenditures to maintain and expand its network and its dividend payments. This allowed the company to strengthen its already solid balance sheet.
Verizon expects to generate even more free cash flow next year. It should benefit from the closing of its $20 billion acquisition Border communicationswhich will expand its fiber network and ability to cross-sell wireless and Internet services to more customers. This should allow the company to further increase its profitable dividend.
Chevron, NNN REIT and Verizon have great dividend payout records. They’re in a great position to continue growing their high-yield payouts into 2026. That makes them great dividend stocks to buy this month to boost your passive income next year.
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Matt DiLallo has positions in Chevron and Verizon Communications. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
The Top 3 Dividend Stocks to Buy in December to Increase Your Passive Income in 2026 was originally published by The Motley Fool
