What’s better than receiving passive income? Enjoyed it for decades.
Generating long-term passive income is easier than you might think. Here are three stocks to buy now and hold forever for a lifetime of dividends.
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Let’s start with some bona fide dividend royalties. AbVie (NYSE: ABBV) is a Dividend King, with 52 consecutive years of dividend increases. We’re not talking about tight dividend increases. Since the spin-off of Abbott Labs in 2013, AbbVie increased its dividend payout by 310%.
The major drugmaker’s dividend yield currently stands at almost 3.6%. That has been at the lower end of AbbVie’s dividend yield in recent years. But there’s a good reason for that: AbbVie shares have performed well.
I expect AbbVie to continue to deliver share price appreciation and growing dividends over the next decade and beyond. Although sales of the company’s top-selling drug, Humira, are declining due to a loss of patent exclusivity, AbbVie has a strong product lineup and a pipeline that continues to advance to market.
Autoimmune diseases Rinvoq and Skyrizi in particular should drive AbbVie’s revenue growth in the coming years. However, the company has plenty of other rising stars, including migraine therapies Ubrelvy and Qulipta, leukemia drug Venclexta and antipsychotic Vraylar. AbbVie’s pipeline also offers tremendous potential, with more than 90 programs in clinical development – more than 50 of which are in mid- to late-stage clinical testing.
Real estate income (NYSE:O) is not a Dividend King like AbbVie. However, the company, which is the seventh largest real estate investment trust (REIT) in the world, has an impressive track record, with its dividend rising for 30 years in a row.
Investors looking for passive income should like Realty Income’s projected dividend yield of 5.4%. They should also be happy that the REIT pays its dividend monthly instead of quarterly. Realty Income even calls itself “The Monthly Dividend Company.”
The commercial real estate market can be volatile at times. The good news about Realty Income is that its portfolio is highly diversified, with more than 1,550 clients representing 90 industries. About 90% of the company’s total rental income is largely protected from economic downturns and threats from e-commerce.
While Realty Income’s dividend is the main draw for investors, I think this REIT will also be able to deliver solid growth. The company has additional capabilities in the US in several areas, including consumer-facing medical facilities, data centers, freestanding retail and industrial facilities. It has even greater growth prospects in Europe, especially in Britain, with an estimated total addressable market of $8.5 trillion.
Verizon Communications (NYSE: VZ) has been popular with income investors for years – and for good reason. The telecommunications giant offers a juicy dividend yield of 6.07%.
This high yield is not the only advantage of Verizon’s dividend program. The company has increased its dividend for eighteen years in a row.
To be sure, Verizon operates in an intensely competitive industry. The company (along with its peers) continually faces significant customer churn. These factors have contributed to Verizon’s modest revenue growth in recent years.
But the telecom leader is still able to generate strong free cash flow ($14.5 billion in the first three quarters of 2024). This resilience should give investors looking for passive income a warm and fuzzy feeling about Verizon’s dividend.
However, I think Verizon’s growth could accelerate by the end of this decade or early next decade. Some industry experts predict that 6G will debut in 2030. The increased capacity, speed and reliability of 6G wireless networks could pave the way for a wave of augmented reality and the adoption of the Internet of Things. If so, demand for Verizon’s wireless services should increase significantly.
Have you ever felt like you missed the boat on buying the most successful stocks? Then you would like to hear this.
On rare occasions, our expert team of analysts provides a “Double Down” Stocks recommendation for companies they think are about to pop. If you’re worried that you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
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Nvidia: If you had invested $1,000 when we doubled in 2009, you would have $350,915!*
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Apple: If you had invested $1,000 when we doubled in 2008, you would have $44,492!*
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Netflix: If you had invested $1,000 when we doubled in 2004, you would have $473,142!*
We’re currently issuing ‘Double Down’ warnings for three incredible companies, and another opportunity like this may not happen anytime soon.
See 3 “Double Down” Stocks »
*Stock Advisor returns November 25, 2024
Keith Speights has positions at AbbVie, Realty Income and Verizon Communications. The Motley Fool holds positions in and recommends AbbVie, Abbott Laboratories, and Realty Income. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
Do you want passive income for decades? 3 Stocks to Buy Now and Hold Forever was originally published by The Motley Fool
