Key Takeaways
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Johnson & Johnson, Procter & Gamble, PepsiCo, Chevron and Verizon pay growing dividends from five different businesses, with yields from 2.0% to 6.4%.
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Free cash flow covers all five dividends, which took 51% to 75% of it over each company's latest twelve months.
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PepsiCo has the thinnest cushion of the five, and Verizon carries the most debt.
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Johnson & Johnson's talc settlement and PepsiCo's look at a possible breakup are the things to watch.
If you're retired, or getting close, the dividend is the part of a stock you actually live on. So it had better come from a business you can hold through a downturn without wondering whether the check will shrink.
That's the case for Johnson & Johnson ( JNJ:NYSE )in health care, Procter & Gamble ( PG:NYSE )in household staples, PepsiCo ( PEP:NASDAQ )in snacks and drinks, Chevron ( CVX:NYSE )in energy and Verizon Communications ( VZ:NYSE )in telecom.
All five pay from free cash flow. So the number I care about most is how much of it each dividend eats up:
Source: TIKR, Nov. 2, 2026.
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1. Johnson & Johnson: Steady cash, steady raises
J&J's dividend grew 5.7% a year from fiscal 2015 to fiscal 2025, from $2.95 a share to $5.14. By TIKR's count, it has paid more per share for 24 fiscal years in a row. After April's raise, it pays $1.34 a quarter, or $5.36 a year.
The dividend is well-covered, eating up 62% of free cash flow over the twelve months to Sept. 27, 2026, and 56% on analysts' fiscal 2026 estimates. Free cash flow has held between $17.5 billion and $20.2 billion every year since fiscal 2017, and the dividend took 52% to 67% of it from fiscal 2020 to 2025:
Third-quarter sales rose 5.9% to $25.4 billion, and J&J raised its full-year outlook. Newer drugs like Tremfya, up 68.2% in the quarter, are growing while Stelara loses sales to cheaper copies.
The risk is talc. J&J's latest quarterly report puts its talc reserve at about $9.0 billion, up from about $3.4 billion after the first quarter.
2. Procter & Gamble: 70 years and counting
P&G's record goes back further still. The company says it has raised its dividend for 70 consecutive years and paid one for 136. It pays $1.0885 a quarter, or $4.35 a year, declared on Oct. 13.
The dividend is comfortably covered, taking 67% of free cash flow over the twelve months to Sept. 30, 2026, and 68% on analysts' fiscal 2027 estimates. P&G expects to pay over $10 billion in dividends this fiscal year.
Organic sales rose 4% in the September quarter, with all 10 product categories and all six regions growing.
Costs are the worry. P&G now expects commodities to cost it about $1.4 billion after tax this fiscal year, an 11% drag on core EPS growth.
3. PepsiCo: The fastest raises, the thinnest cushion
PepsiCo's dividend has grown faster than P&G's, or any other here. It rose 7.4% a year from fiscal 2015 to fiscal 2025, from $2.76 a share to $5.62. It now pays $5.92 a year, for a 4.4% yield.
The cushion is thinner, though. The dividend took 75% of free cash flow over the twelve months through PepsiCo's third quarter, the most of the five. It took more than all of free cash flow in fiscal 2022 and 2024, and 99.6% in fiscal 2025:
Cash flow is recovering. Operating cash flow rose to $7.95 billion in the 36 weeks to Sept. 5, from $5.47 billion a year earlier.
The soft spot is North America. As input costs rose, PepsiCo cut its 2026 core EPS growth outlook to 2.5% to 3.5%, from the low end of 5% to 7%. CEO Ramon Laguarta said on the third-quarter call, "we're not satisfied with the performance in the U.S."
4. Chevron: Raising through the oil busts
PepsiCo's cushion can thin over several years. Chevron's can vanish in one bad year for oil, and it has kept raising its dividend regardless.
On Chevron's third-quarter call, CFO Eimear Bonner said the first priority for its cash is "to grow the dividend consistently." The company says it has done that for 39 consecutive years. It pays $1.78 a quarter, or $7.12 a year, up from $6.84 a share in fiscal 2025.
Free cash flow fell to negative $5.42 billion in fiscal 2016 and to $1.66 billion in fiscal 2020, below the dividend both times. Chevron still paid out more each year:
Today the cushion is wide. The dividend took 51% of free cash flow over the twelve months to June 30, 2026, the least of the five. Third-quarter free cash flow then jumped to $12.0 billion, from $4.9 billion a year earlier, and net debt is just 0.5x EBITDA.
Oil is the risk. Chevron says prices swung $64 a barrel within the quarter, and the payout took 78% of free cash flow as recently as fiscal 2024.
5. Verizon: The biggest check, and the most debt
Verizon's cash flow doesn't swing with oil, and it pays the most of the five, at a 6.4% yield. That's $2.83 a year, up from $2.73 a share in fiscal 2025. The raises are small: 1.9% a year from fiscal 2020 to fiscal 2025. On its third-quarter call, Verizon said it remains "committed to growing the dividend."
The cash backs that up. The dividend took a comfortable 52% of free cash flow over the twelve months to Sept. 30, 2026, and 53% on analysts' 2026 estimates. Free cash flow has run well above the dividend since fiscal 2018:
Third-quarter free cash flow rose 12.1% to $7.8 billion. Verizon now expects full-year free cash flow growth to approach 12%, up from 9% to 10%.
Debt is the weak spot. Net debt is 3.3x EBITDA, the most of the five, and EBIT covers interest just 4.3x. Competition may get tougher, too. On Nov. 2, SpaceX was reportedly in talks to buy Boost Mobile and launch a Starlink-based phone service against Verizon and the other big carriers.
Five steady checks, five different businesses
These five belong in a retirement portfolio because free cash flow covers every dividend, and every business has kept paying through rough patches. They don't share the same risks, so a weak year for drinks or oil doesn't have to drag the whole portfolio down.
J&J and P&G lead because their cushions have been the most consistent, with little debt behind them. PepsiCo, Chevron and Verizon each carry one clear risk: a thin cushion, oil prices and debt.
If I were building a retirement portfolio from scratch, J&J is where I'd start. Its free cash flow is about as steady as it gets, and its newer drugs give the dividend room to keep growing.
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