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Investing in stocks that have a track record of consistently growing their dividends over time can be a powerful wealth-building strategy. By reinvesting those dividends, if you don’t need the income immediately, you can supercharge your returns and set yourself up for a substantial stream of passive income in the future.

While becoming a dividend millionaire won’t happen overnight, holding onto great dividend stocks for the long haul, reinvesting those dividends and adding to your positions when you can, has the potential to generate truly life-changing wealth.

Take Warren Buffett’s investment in Coca-Cola for example. Berkshire Hathaway started buying shares of Coca-Cola back in 1988, investing a total of $1.3 billion by 1994. Today, those 400 million shares are worth over $24.7 billion and are paying Berkshire a staggering $776 million in annual dividends – a nearly 60% yield on the original investment. Buffett’s experience exemplifies the power of identifying high-quality companies, buying their stock and holding on for the long term.

With that in mind, here are three dividend stocks with strong brands, solid fundamentals and a history of dividend growth that could help you build your own dividend empire over time:

The Coca-Cola Company (NYSE:KO)

Speaking of Buffett’s big bet on Coke, the beverage giant is still a classic dividend growth stock. Coca-Cola has raised its dividend for an impressive 61 years straight, placing it in the elite Dividend Kings category. With a current yield of 3.05%, buying the stock today and holding for the long term could provide a substantial income stream down the road.

Coca-Cola delivered solid Q1 2024 results driven by strong performance across many of its leading brands. The company also expects to deliver at least 4% organic revenue growth, at least 8% comparable currency neutral EPS growth, and $11.4 billion in cash flow from operations for full year 2024. With a strong brand portfolio, global scale, and a continued focus on innovation, Coca-Cola looks well-positioned to keep the dividend increases flowing.

Realty Income Corp (NYSE:O)

Realty Income, which bills itself as “The Monthly Dividend Company,” is a real estate investment trust (REIT) that owns a vast portfolio of over 12,000 commercial properties. The REIT has an exceptional track record of paying reliable rising dividends, with 26 consecutive years of increases and a 5-year dividend growth rate of 3.55%. The current dividend yield is an attractive 6.03% paid out monthly.

In Q1 2024, Realty Income saw revenues rise 10% as occupancy remained high at 98.6%. The company continues to use its scale and cost of capital advantages to acquire quality properties, investing $598 million in Q1 at a 7.8% initial cash yield. With a diversified, high-quality tenant base and a long-weighted average lease term around 9.8 years, Realty Income is built to deliver consistent cash flows and dividends.

PepsiCo, Inc. (NASDAQ:PEP)

Coca-Cola’s rival PepsiCo is another dividend growth star, with 51 years of consecutive annual dividend increases under its belt. The current dividend yields an appetizing 3.28%. PepsiCo benefits from its diversification across beverages with brands like Pepsi, Gatorade and Aquafina, and foods like Frito Lay and Quaker.

PepsiCo posted solid Q1 2024 numbers with organic revenue growth of 2.7% and core constant currency EPS growth of 7%. The company also reaffirmed its full-year outlook for 4% organic revenue growth and at least 8% core constant currency EPS growth. With its powerful brands, extensive global distribution, and ongoing investments in innovation, manufacturing, and pep+ sustainability initiatives, PepsiCo appears well-equipped to keep delivering solid results and dividend growth over time.

Give Your Passive Income Stream a Boost

Starting with higher-yielding investments (provided the payouts are sustainable) can be a game-changer for investors looking to speed up their journey to significant dividend income. For example, earning an 8% annual yield on a $10,000 investment would grow to over $22,000 in a decade, while a 12% yield would compound to $33,000. After 10 years at 12%, your original investment would be generating roughly 39.6% annually if you chose to start collecting the cash instead of reinvesting.

Two high-yield opportunities worth considering outside of the stock market are the Arrived Private Credit Fund and the Ascent Income Fund.

Arrived Private Credit Fund

The Arrived Private Credit Fund offers investors an opportunity to earn passive income by investing in a diversified pool of real estate-backed loans. With a target yield of 7-9% and a low minimum investment of just $100, the fund makes it easy for anyone to get started. The fund’s strategy focuses on providing short-term financing for professional real estate projects like property renovations, rehabs or new home construction. All loans are secured by residential real estate, offering an added layer of protection. Investors can look forward to monthly dividend payouts, quarterly liquidity options and the potential for capital preservation. The Arrived Private Credit Fund could be an attractive choice for income-focused investors seeking to diversify their portfolios beyond traditional stocks and bonds.

Click here to learn more about the Arrived Private Credit Fund

Ascent Income Fund

The Ascent Income Fund is a cornerstone investment vehicle designed for income-focused investors seeking to generate consistent cash flows from real estate debt investments. With a historical distribution yield of 12.1%, the fund aims to provide investors with higher levels of income than many other fixed-income alternatives. The Ascent Income Fund primarily invests in senior positions in commercial real estate loans, giving it payment priority to enhance security. The fund also offers investors flexibility with quarterly redemption options after an initial one-year holding period. For a limited time, the minimum investment for the Ascent Income Fund has been reduced from $20,000 to $5,000 for first-time investors, making it more accessible to a broader range of people. Overall, the Ascent Income Fund could be a compelling option for yield-hungry investors who also want exposure to the real estate market.

Click here to learn more about the Ascent Income Fund from EquityMultiple

Stay The Course

While high yields are tempting, remember that successful dividend investing is a marathon, not a sprint. The most important ingredients are quality companies with enduring competitive advantages, long growth runways and shareholder-friendly management teams committed to sharing the wealth through rising payouts. By building a diverse portfolio of such companies, reinvesting the dividends and staying patient, you put yourself on the path to generating a bountiful passive income stream that could one day make you a dividend millionaire.

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This article 3 Stocks That Could Make You A Dividend Millionaire originally appeared on Benzinga.com