Invest in Stocks that Pay Passive Income for a Lifetime
Owning stocks of strong companies that regularly pay passive income to shareholders can provide comfort and long-term financial security. By carefully selecting the right dividend stocks, investors can build a portfolio that yields around 3% annually in dividend income. Furthermore, if the selected companies continue to grow their earnings, they will also increase their dividend payment and yield on the original investment.
To get started, three Motley Fool contributors were asked to share their top stock picks for generating passive income. Here’s why they chose Coca-Cola (NYSE: KO), Philip Morris International (NYSE: PM), and Home Depot (NYSE: HD).
Invest in Warren Buffett’s favorite
John Ballard recommends investing in Coca-Cola due to its global brand power and high annual sales volume. The company owns over 200 brands including Fanta, Sprite, Minute Maid juices, Dasani water, Costa Coffee, Fuze Tea, Powerade, and Simply – creating numerous avenues for driving sales.
Coca-Cola generated $10 billion in profit from $46 billion of revenue over the last four quarters. The company paid out three-quarters of its earnings as dividends over the last year or $0.485 per share and has increased its dividend for 62 consecutive years.
A transformative tobacco stock
Jeremy Bowman suggests Philip Morris International due to its diverse revenue streams beyond traditional tobacco products. Approximately 40% of its revenue comes from next-gen smoke-free products like iQOS heat-not-burn devices and Zyn chewable nicotine pouches.
PMI has been aggressively expanding these product lines by acquiring rights from Altria as well as investing hundreds of millions into production facilities in the US.
A market-beating stock with an excellent dividend
Jennifer Saibil highlights Home Depot as a market-beating stock with an attractive dividend yield despite current challenges within the retail industry. While comparable sales were down from last year in the recent fiscal second quarter ended July 28th, total sales saw slight growth.
Home Depot has paid a steadily increasing dividend for close to 40 years which has added tremendous value to the stock price over time.
Considering these compelling options presented by our contributors allows investors to take advantage of potential passive income opportunities while holding these stocks forever – Coca-Cola boasting steady profits through globally recognized brands; Philip Morris International diversifying into next-gen smoke-free products; Home Depot offering an attractive yield even amidst ongoing challenges within the retail industry.
