Rely on long-term dividend payers for stable returns in any market.
It’s normal to look at the state of the stock market in 2022 and wonder how your portfolio should change. Major indexes are still underwater after three months of trading, there is uncertainty around Federal Reserve interest rate policy, and the war in Ukraine is roiling commodity and energy markets worldwide. But as Sir John Templeton famously wrote in his 16 rules for investment success, “The investor who says, ‘This time is different,’ when in fact it’s virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing.” Yes, there’s uncertainty in this moment — but don’t panic! In the long run, the stock market has always found a way to thrive. If you want to move past the day-to-day uncertainty and instead focus on building long-term wealth, then consider these nine dividend stocks to buy and hold forever.
AbbVie Inc. (ticker: ABBV)
AbbVie has put in a strong performance since its March 2020 lows, surging from near $65 to more than $160 at present for a stunning gain of roughly 150%. However, AbbVie’s real potential lies in consistent long-term results along with generous dividends. Born out of a 2013 spinoff from Abbott Laboratories (ABT), AbbVie’s roots go back more than 130 years. And more recently, since the company’s independence almost a decade ago, AbbVie has increased its dividend by more than 250% in short order. Thanks to a strong mix of legacy blockbuster drugs and a pipeline of new and innovative cures, ABBV stock should continue to deliver for many years to come. And since health care expenses tend to be stable regardless of macroeconomic conditions, you don’t have to worry about any disruption to the business model as with retailers or consumer tech companies.
Dividend yield: 3.2%.
Consolidated Edison Inc. (ED)
If you’re looking for a stock to believe in forever, then it’s worth considering a stock like ConEd that has a long history of success on Wall Street. Getting its start as the New York Gas Light Company in 1823, this utility is one of the oldest stocks in America. What’s more, in January ConEd notched its 48th consecutive annual increase in dividends for shareholders, the longest period of consecutive annual dividend increases of any utility stock in the S&P 500. Whatever the future holds, you can be sure of steady electricity demand in the metro New York area that ED serves. That makes this a stock to buy and hold for the long haul.
Dividend yield: 3.3%.
Boston Properties Inc. (BXP)
Boston Properties is a real estate investment trust, or REIT. This special class of corporation is granted tax benefits to help it operate in the capital-intensive arena of real estate, but in exchange must deliver 90% of taxable income back to shareholders. As the largest publicly held company that owns and develops Class A office properties in the U.S., that means BXP has a mandate for consistent and generous paydays as elite businesses pay premium rents in its buildings. BXP operates almost exclusively in large metro markets, including Los Angeles, New York, San Francisco and Washington, D.C., in addition to Boston. With more than 50 million square feet across roughly 200 in-demand properties, you can be sure top-tier tenants in thriving U.S. cities will want a berth in BXP buildings for the foreseeable future.
Dividend yield: 3.0%
Johnson & Johnson (JNJ)
Founded more than 130 years ago, JNJ has a rich history and a dominant name in the health care sector. Whether you are looking at consumer-focused products such as Band-Aid or Tylenol, or its lucrative oncology prescription drugs, or its best-in-class digital medical devices for operating rooms, this health powerhouse has a lot of things going for it. Perhaps the most compelling fact of all, however, is that Johnson & Johnson has the balance sheet to back up its brand power. Consider that alongside Microsoft Corp. (MSFT), JNJ is one of just two AAA-ranked U.S. stocks when it comes to debt ratings. Or that the company has increased its already generous dividend once a year for a whopping six decades running. If you want a long-term bet, it’s hard to find one better than JNJ.
Dividend yield: 2.4%.
Morgan Stanley (MS)
One of the most iconic asset managers in the world, $150 billion financial powerhouse Morgan Stanley isn’t going anywhere anytime soon. It’s already a leader in wealth management and investment solutions, yet it continues to grow at a brisk pace. Case in point: Last year alone, it added $1 trillion in assets under management, or AUM, and is plotting a path to $10 trillion in total AUM the near future. This is a nearly 100-year-old bank that has navigated all manner of financial and economic crises, and it should continue to perform very well in the years ahead regardless of whatever short-term disruptions happen along the way.
Dividend yield: 3.1%.
Prudential Financial Inc. (PRU)
Prudential is one of the most solid investments out there — “like a rock,” as the firm’s old marketing phrase goes. It offers diversified operations across insurance, investment management and other financial products worldwide. This nearly $50 billion company has a host of profitable business lines that offer consistent and reliable results. Though revenue isn’t exactly going like gangbusters, growth doesn’t have to be significant when you already have $1.7 trillion in assets under management like PRU does right now. And with a generous dividend that is only roughly a third of total profits, and thus likely to increase over time even if profits don’t surge significantly higher, income investors have a lot of incentive to hang on for the long term in this leading company.
Dividend yield: 4.0%.
Public Storage (PSA)
Valued at $65 billion, Public Storage is a giant of a real estate firm that has a ton of tangible value simply from the land alone. But what makes PSA a lock for long-term investors is that it generates significant and reliable revenue from those properties via regular rent checks on storage lockers for consumers and businesses. With occupancy rates regularly over 90%, including 2021 data that showed a 96.3% average occupancy rate company-wide across last year, it’s hard to imagine a world where Public Storage is not holding its own. What’s more, PSA tends to be “countercyclical” — meaning that if the economy does hit a snag, folks who downsize out of larger homes or move in with relatives often have to rely on storage lockers. That provides a good measure of long-term stability for this stock as it performs well in tough times as well as good ones.
Dividend yield: 2.0%.
Procter & Gamble Co. (PG)
Procter & Gamble is the firm behind some of the biggest consumer names on the planet, from Gillette shaving products to Pampers diapers to Crest toothpaste. Chances are you have a medicine cabinet or dresser drawer featuring P&G products, and chances are that the next time you go to the store you’re going to keep buying the same tried-and-true brands. P&G has been paying a dividend for 131 consecutive years, since its incorporation in 1890, and it has increased its dividend for 65 consecutive years. It’s not a glamorous or high-growth business to peddle consumer staples, but it certainly is reliable for investors who are taking the very long view of their portfolio.
Dividend yield: 2.3%.
Verizon Communications Inc. (VZ)
As digital tools are a must-have for businesses and consumers alike in 2022, Verizon is about as sure of a bet as you’ll find, since folks will cut back on every other expense before they give up internet access. VZ boasts massive scale, with roughly $140 billion in annual revenue from millions of wireless, broadband, fiber optic and cable TV connections. It has a near duopoly in the U.S. with fellow telecom giant AT&T Inc. (T), and a high barrier to entry from any future competition thanks to the very expensive and regulated nature of building a telecom network. And to top it all off, VZ is only paying about half of its operating profits as dividends — so even without future growth, there is plenty of headroom for future increases.
Dividend yield: 5.0%
9 dividend stocks to buy and hold forever:
— AbbVie Inc. (ABBV)
— Consolidated Edison Inc. (ED)
— Boston Properties Inc. (BXP)
— Johnson & Johnson (JNJ)
— Morgan Stanley (MS)
— Prudential Financial Inc. (PRU)
— Public Storage (PSA)
— Procter & Gamble Co. (PG)
— Verizon Communications Inc. (VZ)
More from U.S. News