2 Dividend King Stocks That Will Likely Raise Their Payouts to All-Time Highs in the First Half of 2025

Dividend Kings are an elite category of companies that have paid and raised their dividends for at least 50 consecutive years. But not all Dividend Kings have a schedule for making these raises.

For decades, Coca-Cola (KO 0.05%) and Procter & Gamble (PG 0.44%) have raised their payouts in the first half of the calendar year. Here's why both Dividend Kings stand out as solid buys for 2025.

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Coke's next dividend raise should come in February or March

Coke has paid and raised its dividend for 62 consecutive years. And like clockwork, for over 30 years in a row, it has announced a dividend raise in February or March.

While the timing of the raises has been consistent, the size has varied. Coke has made minimum, $0.01 per share per quarter raises multiple times in recent years to keep its streak alive. The raises tend to be larger if Coke's business is doing better and it feels it can pass along more profits to shareholders. But Coke also wants to avoid digging itself into a hole that would make the dividend expense too much of a burden to support future raises.

Although Coke passes the majority of profits along to shareholders through dividends, the company also retains some earnings so it can reinvest in the business, maintain a solid balance sheet, or possibly fund an acquisition with cash.

Acquisitions have been an integral part of Coke's over 130-year history. The company has expanded far beyond soft drinks, with acquisitions such as Minute Maid in 1960, Vitaminwater in 2007, Honest Tea in 2011, a minority stake in Monster Beverage in 2015, Topo Chico in 2019, Costa Coffee in 2019, BodyArmor in 2021, and more. Not every acquisition has been a smashing success, but all told, I'd say Coke has done a decent job in deciding which companies to buy -- but a phenomenal job expanding the marketing and distribution of its brands. For example, Coke has compounded Topo Chico volumes by tenfold from pre-acquisition levels in 2016.

With a 3.1% yield and a 21.8 forward price-to-earnings (P/E) ratio, Coke stands out as an excellent dividend stock to buy in 2025.

Expect P&G to raise its dividend in April

P&G has raised its dividend for 68 consecutive years, giving it one of the longest track records among Dividend Kings. Every year for the last 20 years, P&G has announced a dividend raise in April, usually before its fiscal third-quarter earnings announcement. The trend should continue in calendar year 2025.

Like Coke, the timing of P&G's dividend increases is consistent, but the size of the raises can vary. The last raise was 7%. Before that, in order, each annual raise was 3%, 5%, 10%, and 6%. In general, I would pencil in a mid-single-digit dividend raise from P&G. But the company also buys back a considerable amount of stock. In fact, the size of its buyback program rivals its dividend expense.

Data source: Procter & Gamble.

As you can see in the table, P&G consistently repurchases a ton of stock. Over the last decade, it has spent a combined $146.49 billion on dividends and buybacks -- rewarding investors with passive income and reducing its share count by 12.8%.

While some investors may prefer P&G scrap the buyback program and focus on dividends, it can be better for long-term investors to do a hybrid approach. By reducing the share count, buybacks artificially increase earnings per share (EPS), allowing EPS to grow faster than net income. Accelerated EPS growth can help justify a higher stock price and, in turn, higher capital gains over time.

P&G has a dividend yield of 2.4% and a forward P/E of 24.1 -- making it more expensive than Coke. However, P&G could be a better buy for folks who prefer P&G's lineup of baby products, detergents, fabric care, grooming products, cleaning products, and personal care products over Coke's beverage brands.

Two dividend stocks you can count on no matter what 2025 brings

Coke and P&G have recession-resistant business models, making them great buys for risk-averse investors in 2025. Coke and P&G sell relatively low-cost, daily use products far less dependent on the economic cycle than big-ticket discretionary items.

So, if there is an economic slowdown, you can rest easy knowing Coke and P&G have endured all kinds of market dynamics in the past and have still been able to raise their dividends no matter what the business cycle is doing.