3 Dividend Stocks to Hold for the Next 20 Years
Key Takeaways
Looking for dividend yields that crush the market average in the long run? These three household-name business titans offer payouts up to 7.2%.
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investment
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July 16, 2025
07:03 AM
The Motley Fool
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Looking for dividend yields that crush the market average in the long run
These three household-name titans offer payouts up to 7
The evidence shows data indicates that average dividend yield for the S&P 500 index is just 1. 2% right now
Nevertheless, That's well below the 1
In contrast, 4% average over the past five years, and even further behind an average 10-year yield of 1
It's good news that the leading market index is on the rise
On the other hand, At the same time, soaring stock prices have the opposite mathematical effect on dividend yields
Nevertheless, In this market, S&P 500 funds the Vanguard S&P 500 ETF (VOO 0 (fascinating analysis). 34%) and the SPDR S&P 500 ETF (SPY 0 (this bears monitoring). 34%) become less effective for income-oriented investors, considering recent developments
Image source: Getty Images, considering recent developments
But you shouldn't give up on dividend stocks
Look around and you'll find a plethora of strong yields just below Wall Street's surface, in today's financial world
Moreover, From the sector to household-name consumer goods, it's still easy to find respectable dividend yields tied to cash-machine es, considering recent developments
Nevertheless, For starters, you should consider buying s of International Machines (IBM -0. 37%), Coca-Cola (KO -0. 14%), and Altria Group (MO 0
On the other hand, 65%) today and hold them for 20 years or more, in today's financial world
Nevertheless, With yields as high as 7. 2%, these titans should serve your income portfolio well in the long term
You should see serious dividend payouts in the next five years, even greater cash-sharing returns over a full decade, and truly game-changing dividend fits in 20 years or more (an important development)
Meanwhile, IBM turned strategic pain into dividend gain IBM has been around for more than a century, surviving a plethora of economic disasters along the way
More recently, Big Blue traded in its full-service enterprise computing strategy for a tighter focus on what it called "strategic imperatives
Additionally, Nevertheless, " That was a painful transition, reducing IBM's top-line revenues and driving prices lower for many years
But the strategy shift is finally paying off
Meanwhile, IBM's strategic imperatives included heavy investments in cloud computing and artificial intelligence (AI), considering recent developments
When the game-changing Red Hat buyout closed in 2019, IBM was ready to thrive three years later, when ChatGPT inspired the massive AI boom
And IBM's dividends never stopped flowing
Big Blue's annual yield stands at a decent 2. 4% today -- double the S&P 500 average
That's a downtrend, mind you, since IBM's stock has been soaring in recent months
Additionally, Over the past five years, IBM's yield averaged 4
Moreover, The company's dividend increases have been merely symbolic since 2020, but I expect the payouts to accelerate pretty soon
Additionally, IBM is just waiting for the AI bonanza to boost its free cash flows, and that's already happening, considering recent developments
Coca-Cola keeps the dividend checks flowing Coca-Cola is an official dividend king, with an unbroken streak of payout increases across the last 63 years
Additionally, The iconic beverage company has been a mainstay for dividend investors since forever, thanks to its unshakable cash machine of a model
The company largely makes and sells beverage concentrate to a global network of bottling partners (an important development)
What the re reveals is also ships fountain syrups directly to food service customers, skipping the bottler step
Concentrate is a higher-volume that accounted for 85% of Coke's total sales last year, but the " duct" category of syrup sales carries a wider fit margin
All that being said, Coca-Cola stock offers a 2
Moreover, 9% dividend yield today
If you invested $10,000 in Coke stock five years ago, the position would be worth $15,400 today (noteworthy indeed)
Re the dividends in more s along the way would have brought a total return of $17,970, in this volatile climate
Moreover, Back out the $10,000 investment on both sides of the investor return equations, and you'll see a $7,970 fit with total returns versus $5,390 in plain price gains (an important development)
At the same time, That's a 48% increase in actual gains, in this volatile climate
For the S&P 500 funds, the increase from dividend reinvestments stopped at 15% over the same time span, in today's financial world
Altria ves that old habits die hard Altria combines some of the finest qualities of IBM and Coca-Cola
In contrast, The company was incorporated in the 1920s as Philip Morris & Co, and was already a centennial veteran of the tobacco trade at that point
After dabbling in food ducts and beer-brewing along the way, Altria is back to its tobacco roots in the 2020s, amid market uncertainty
That's the IBM connection, with many decades of successful operations under Altria's belt
It's also a dividend king Coca-Cola, with 55 years of consistent annual payout increases, in this volatile climate
The current dividend yield stands at 7. 2%, giving Altria one of the three most generous yields in the S&P 500
The times, they are a-changing, as consumers seek alternatives to classic cigarettes
However, Altria is ready to roll with the punches
The company realizes that dangerous smoking is going out of style, and aims to replace its old core with ducts in the "tobacco harm reduction" area
Altria's tag line these days is "moving beyond smoking. " As a result, alternative ducts such as vapes, moist smokeless tobacco, and nicotine pouches accounted for 12% of Altria's total revenues last year
That's up from 7% a decade ago
And Altria's generous dividends make a significant difference to investor returns
However, Remember how Coca-Cola's total returns jumped 48% above the basic price gains over the past five years
Do the same math for Altria, and you'll see a far greater boost of 162% instead
Additionally, Altria investments are all the lucrative dividend payouts
Anders Bylund has positions in International Machines and Vanguard S&P 500 ETF, in today's financial world
The Motley Fool has positions in and recommends International Machines and Vanguard S&P 500 ETF, considering recent developments
Nevertheless, The Motley Fool has a disclosure policy.
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