The S&P 500 (SNPINDEX: ^GSPC) dividend yield is hovering around a historic low near 1%. If you’re trying to generate more passive income, you don’t have to settle for that. Some of the best-known consumer brands offer higher yields.
Three quality dividend stocks I’d buy this month are McDonald’s (NYSE: MCD), Colgate-Palmolive (NYSE: CL), and Procter & Gamble (NYSE: PG). These stocks yield 2.3% or more, and their dividends are supported by strong free cash flow.
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1. McDonald’s
At the time of this writing, shares of McDonald’s are trading about 23% below their recent highs, pushing the forward dividend yield up to 2.89% — nearly three times the market average.
The sell-off stems from soft U.S. comparable sales, which rose just 0.8% year over year in the second quarter. Notably, management didn’t place the blame on high gas prices or other external headwinds. They pointed to execution issues — and that kind of determination to improve operations is what can drive excellent returns for shareholders over time.
McDonald’s remains a global powerhouse with a profitable business model, generating revenue from fees paid by franchised restaurants. About 95% of its restaurants are franchised. Over the last year, it generated $7.8 billion in free cash flow on $28 billion in revenue and paid out 67% of free cash flow as dividends.
Management also sees room to expand margins by reducing complexity and improving restaurant efficiency and service times. The dividend has grown about 7% annually over the past five years, and stronger margins should help maintain that trend.
With a 49-year streak of dividend increases and a renewed focus on productivity, McDonald’s looks well-positioned to reward patient income investors.
2. Colgate-Palmolive
Colgate-Palmolive is trading roughly 17% off its recent highs, lifting its forward dividend yield to 2.35%. It’s a classic staples business: steady demand, resilient cash flow, and a long history of annual dividend growth.
Trailing-12-month revenue rose 5% year over year to $21 billion, supported by premium products like Hill’s pet nutrition and strength in international markets.
Colgate is a global leader in toothpaste, with 41% market share in 2025. Selling everyday essentials in oral and personal care generates reliable sales and the free cash flow that funds consistent dividend growth. TTM free cash flow increased 14% to $3.8 billion, and the company paid out 43% of that free cash flow as dividends.
