3 Magnificent Dividend Stocks to Buy and Hold Forever

3 Magnificent Dividend Stocks to Buy and Hold Forever

What is the top priority for income investors? It’s an easy question. The answer is income – preferably reliable, growing income.

Dividend stocks are one of the best ways to generate income. Once you find great stocks with reliable, growing dividends, you’re ready to rake in money over the years. While there are many good alternatives for income investors, some stocks particularly stand out. Here are three wonderful dividend stocks to buy and hold forever.

1. Johnson & Johnson

Johnson & Johnson (NYSE:JNJ) has been a favorite of income investors for decades. It is one of the largest healthcare companies in the world, with huge pharmaceutical and medical technology businesses.

Only a handful of companies can boast a more impressive dividend history than Johnson & Johnson. The healthcare giant has increased its dividend for 62 consecutive years, ranking it among the top Dividend Kings. J&J offers an attractive forward dividend yield of over 3.4%.

Johnson & Johnson has demonstrated remarkable resilience. The company, founded in 1886, has weathered economic recessions, wars and global pandemics. Today, it generates annual sales of nearly $90 billion and has a cash stock of more than $26 billion.

To continue to be successful, Johnson & Johnson must continually roll out new products. This shouldn’t be a problem. The company leads the industry in research and development spending. J&J also regularly strengthens its lineup through acquisitions, with recent examples including deals to acquire privately held biotech company Proteologix and medical device maker. Medical shockwave.

2. Target

Target (NYSE:TGT) has been in business since 1902. Today it is one of the largest discount retailers with nearly 2,000 stores in the United States. Target also has a growing e-commerce business.

Like Johnson & Johnson, Target is a dividend king. The company has increased its dividend for 52 consecutive years – every year since it began trading publicly in 1967. It could soon extend that streak to 53 years. Target’s forward dividend yield stands at almost 3%.

Investors should be able to count on Target’s dividend for a long time. The company’s business model of selling a wide variety of products at discounted prices is unlikely to be disrupted.

Target continues to find new ways to increase sales. For example, its Roundel advertising business is now the fastest-growing part of the business. The Target Circle loyalty program, one of the largest customer loyalty programs in the United States with more than 100 million members, helps build customer loyalty and increased spending.

3. Verizon Communications

VerizonCommunications (NYSE:VZ) is the new addition to the list. The telecommunications provider was created in 2000 through the merger of Bell Atlantic and GTE. However, these two companies had a long history. Verizon now offers data, voice and video services worldwide.

The company has increased its dividend for 17 consecutive years. While that track record isn’t as impressive as J&J and Target’s, Verizon has the longest streak of dividend hikes in the U.S. telecom industry. Income investors should especially like its ultra-high forward dividend yield of over 6.7%.

Verizon needs to generate strong revenue free movement of capital so that dividends continue to flow and grow. There’s some good news on that front: The telecom giant reported free cash flow of $2.7 billion in the first quarter of 2024, up from $2.3 billion in the year-ago period.

Don’t expect Verizon to deliver jaw-dropping growth. However, the company’s wireless business is strong. More importantly, Verizon should be able to provide investors with the reliable and growing income they want.

Should you invest $1,000 in Johnson & Johnson right now?

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Keith Speights holds positions at Target and Verizon Communications. The Motley Fool posts and recommends Target. The Motley Fool recommends Johnson & Johnson and Verizon Communications. The Mad Motley has a disclosure policy.

3 Magnificent Dividend Stocks to Buy and Hold Forever was originally published by The Motley Fool

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