There's a strong parallel between for passive income and planting an apple tree. Both require some work up front.
But if all goes well, you can reap the fruits of those labors (literally, in the case of the apple tree) for years afterward. Of course, there are some potential pitfalls.
An apple tree could become diseased and stop bearing fruit. Similarly, the companies you invest in could struggle and stop distributing income.
The good news for investors is that selecting the right dividend stocks can minimize the risk of that happening. Want decades of passive income. Here are three stocks to buy now and hold forever.
Image source: Getty Images. AbbVie If you're looking for the companies with the best dividend track records, you'll want to check out the elite group of stocks known as the Dividend Kings.
The list includes over 50 stocks. I think AbbVie (ABBV -0. 93%) ranks as one of the best. Many of the Dividend Kings don't offer kingly yields. However, AbbVie does.
At its current price, the drugmaker's forward dividend yield stands at 3. Moreover, AbbVie has increased its payouts annually for 53 consecutive years.
It has more than quadrupled its dividend since its spinoff from Abbott Laboratories in 2013. You'll get more than just a dividend with AbbVie, though.
The company should have solid growth spects thanks to rising stars such as Rinvoq, Skyrizi, Ubrelvy, and Qulipta.
AbbVie's pipeline looks mising as well, with around 90 grams in clinical development, roughly 50 of which are in mid- or late-stage testing.
Perhaps the most impressive thing AbbVie, other than its dividend, is the company's resilience.
Not long ago, it faced the loss of patent exclusivity for its top-selling duct, the autoimmune disease drug Humira.
Today, the company has two successors treatments to Humira that together are on track to be even bigger winners. Enbridge Want even more passive income. Consider in Enbridge (ENB -0.
At its current price, this mid energy leader offers a forward dividend yield that's a hair over 6%.
And while Enbridge isn't a Dividend King AbbVie, it has increased its payouts annually for an impressive 30 consecutive years. AbbVie, Enbridge has a highly resilient.
Around 80% of its earnings before interest, taxes, depreciation, and amortization (EBITDA) are tected against inflation. Less than 1% of its EBITDA is tied to volatile commodity prices.
Roughly 98% of its EBITDA is either regulated or contracted via take-or-pay agreements (where buyers commit to either purchase ducts or pay a penalty if they don't).
Enbridge is one of the biggest mid energy companies. Its pipelines transport around 30% of the crude oil duced in North America and 40% of total U. Crude oil imports.
It also transports close to 20% of all natural gas used in the U.
In addition, thanks to some strategic acquisitions in 2023, Enbridge now ranks as the largest natural gas utility in North America by volume. This helps lower the company's risk level even more.
I think Enbridge's utility also makes the passive income the company generates more dependable. Realty Income Realty Income (O -0. 09%) stacks up pretty well with Enbridge when it comes to dividends.
The real estate investment trust (REIT) pays a forward dividend yield of 5. 6% at the current price. Realty Income has also boosted its dividend annually for 30 consecutive years.
Another attribute that will appeal to many investors is that Realty Income distributes its dividends monthly rather than quarterly. It even trademarked the name "The Monthly Dividend Company.
" Realty Income has a strong tenant base, leasing perties to 1,598 different clients across 91 industries.
Its triple-net leases generate nearly 100% gross margins since its tenants are responsible for covering major perty expenses such as insurance, maintenance, perty taxes, and utilities.
These leases are also usually long, which vides the REIT with consistent, recurring revenue. I also Realty Income's long-term growth spects.
The company targets a total addressable market of around $14 trillion. More than 60% of this market is in Europe, where Realty Income faces only two major rivals.
Keith Speights has positions in AbbVie, Enbridge, and Realty Income. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, Enbridge, and Realty Income.
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