In a sense, there is no such thing as easy money. But once you have accumulated money to invest, it can be easy to earn more. That is the key to generating passive income.
Some investment options require constant monitoring. You may not be able to hold on to them for long. Others, however, are excellent long-term choices.
Want decades of passive income? Here are three stocks to buy now and hold forever.
1. AbbVie
AbbVie (NYSE: ABBV) is one of the largest biopharmaceutical companies in the world with a market capitalization of around $345 billion. Its product line includes four blockbuster drugs and several others with the potential to generate sales of $1 billion or more.
You may not be impressed by AbbVie’s forward dividend yield of 3.17%. However, the company’s dividend track record is impressive. AbbVie has increased its dividend for 52 consecutive years, putting it in the elite group of stocks known as Dividend Kings.
AbbVie’s main downside is that its revenue and profits have been hurt by biosimilar competition to its best-selling drug, Humira. Investors need not worry, however. AbbVie expects growth to return soon thanks to other rising stars in its lineup, including Humira’s two successors — Rinvoq and Skyrizi.
In fact, I’d argue that AbbVie’s handling of the loss of patent exclusivity for Humira underscores why this is a great stock to generate long-term passive income. The company’s strategy of expanding Humira’s market dominance while investing in new drug development and making smart acquisitions shows that it should be able to successfully navigate future patent cliffs.
2. Brookfield Infrastructure
Brookfield Infrastructure‘S (NYSE: BIP) (NYSE: BIPC) name sums up his business: infrastructure. The company owns cell towers, data centers, power lines, pipelines, rail, semiconductor factories, toll roads and more.
Because of its roots as a limited partnership (LP), Brookfield Infrastructure pays distributions instead of dividends. Whatever you call them, they’re attractive. The forward distribution yield for the LP (which trades under the BEP ticker) is 5.12%, while the yield for the corporate entity (which trades under the BEPC ticker) is 4.04%.
These distributions are also very reliable. Brookfield Infrastructure has increased its distributions for 15 years in a row. The company expects to continue that trend with annual distribution growth of 5% to 9%.
Brookfield Infrastructure also has a solid, repeatable strategy for long-term growth. The company acquires infrastructure assets that are attractively valued. It then increases the value of the businesses using its operational expertise. Finally, the company sells mature assets with limited growth potential to fund new investments.
3. Verizon Communications
Most Americans are probably at least somewhat familiar with Verizon Communications (NYSE: VZ)The company is one of the largest telecommunications providers in the world.
Verizon offers a forward dividend yield of 6.27%, the highest of the three stocks on this list. The telecom giant has raised its dividend for 18 consecutive years. With Verizon’s improving free cash flow, I expect this streak of dividend increases to continue.
Income investors aren’t the only ones who have something to say about Verizon. The stock should also appeal to value investors with its low forward price-to-earnings ratio of 9.3.
Granted, Verizon probably won’t deliver sizzling organic growth. However, the company is well-positioned to grow through acquisitions. One example of this is Verizon’s plans to Border communication for $20 billion in an all-cash transaction. This deal will greatly expand Verizon’s fiber footprint in the U.S.
Should You Invest $1,000 in AbbVie Now?
Before you buy AbbVie stock, you should consider the following:
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Keith Speights has held positions at AbbVie, Brookfield Infrastructure Corporation, Brookfield Infrastructure Partners and Verizon Communications. The Motley Fool recommends Brookfield Infrastructure Partners and Verizon Communications. The Motley Fool has a disclosure policy.
Want Decades of Passive Income? 3 Stocks to Buy Now and Hold Forever was originally published by The Motley Fool
