Want Decades of Passive Income? 3 Stocks to Buy Now and Hold Forever
Relax, do what you enjoy, and rake in money. That probably sounds like a great life for most people. Making it a reality isn't easy, but it's possible.
The key is to generate passive income. You'll need to have money to make money, but once you've got it, there are plenty of great alternatives to put your money to work for you. Want decades of passive income? Here are three dividend stocks to buy now and hold forever.
1. AbbVie
AbbVie (NYSE: ABBV) is one of the world's biggest biopharmaceutical companies. It markets 12 blockbuster drugs, including Humira and Botox, plus several others that generate hundreds of millions of dollars per year.
You won't find many companies with a stronger dividend program than AbbVie. It's a Dividend King with 52 consecutive years of dividend increases. Since spinning off from Abbott in 2013, AbbVie has increased its dividend payout by over 287%. Its forward dividend yield is around 4%.
AbbVie's financials are rock-solid. The drugmaker's revenue totaled $54.3 billion last year with a profit of nearly $4.9 billion. As of March 31, 2024, AbbVie's cash position stood above $18 billion.
I especially like AbbVie's resilience. The company began facing biosimilar competition for its top-selling drug, Humira, last year. However, it's on track to soon return to robust growth thanks to new products including Rinvoq and Skyrizi.
2. Lowe's Companies
Lowe's Companies (NYSE: LOW) ranks as the second-largest home improvement retailer. It operates over 1,700 stores across the U.S.
At first glance, you might not be overly impressed with Lowe's forward dividend yield of slightly over 2%. However, like AbbVie, Lowe's is a Dividend King. The company has increased its dividend for 51 consecutive years. Over the last five years, Lowe's has doubled its dividend payout.
The home improvement giant is a money machine. Lowe's generated $86.4 billion in revenue in its fiscal year ending Feb. 2, 2024, with a profit of over $7.7 billion.
Granted, the current macroeconomic environment with stubbornly high inflation and the uncertainty about the timing of potential interest rate cuts is negatively impacting the home improvement industry. However, the long-term outlook remains strong -- especially with the median age of homes in the U.S. now above 40 years.
3. Public Storage
Public Storage's (NYSE: PSA) name reflects its business well. The real estate investment trust (REIT) owns and operates self-storage facilities -- more than 3,300 across 40 U.S. states.
REITs often offer juicy dividends. Public Storage is no exception with its forward dividend yield of 4.3%. Last year, the company boosted its dividend payout by a whopping 50%.
Public Storage continues to generate solid funds from operations (FFO), arguably the most important financial metric for a REIT. It boasts strong A2 and A credit ratings from Moody's and S&P, respectively. The company's cumulative same-store net operating income growth over the last 20 years has more than doubled the core real estate sector average.
The self-storage market should continue to grow. In addition, the significant fragmentation of this market provides Public Storage opportunities to expand via acquisitions of new properties. The company's scale, brand recognition, balance sheet, and technology give it competitive advantages that should keep it on top for decades to come.
Should you invest $1,000 in AbbVie right now?
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Keith Speights has positions in AbbVie and Lowe's Companies. The Motley Fool has positions in and recommends Abbott Laboratories, Moody's, and S&P Global. The Motley Fool recommends Lowe's Companies. 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