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3 Dividend Stocks That Could Provide Solid Income For The Rest Of Your Life

By Haris Anwar/Investing.comStock MarketsAug 11, 2022 01:46PM ET
www.investing.com/analysis/3-dividend-stocks-that-could-provide-solid-income-for-the-rest-of-your-life-200628400
3 Dividend Stocks That Could Provide Solid Income For The Rest Of Your Life
By Haris Anwar/Investing.com   |  Aug 11, 2022 01:46PM ET
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  • Companies that increase payouts regularly demonstrate that they can produce steady and reliable income for their investors
  • Home Depot is positioned to continue sending dividend checks to retirees
  • Apple is one of the most cash-rich companies in the world, with a lot of room for further payout hikes

The past three years have been rather difficult for income-focused investors looking to earn stable, reliable gains in the stock market. First was a pandemic-triggered market crash, then the highest inflation in four decades that pushed markets into bear territory, and now the word recession terrifies everyone.

But despite the numerous macroeconomic pressures, there are still reasonable ways to add stability to your portfolio. One proven way to secure growing income is to buy quality dividend-growth stocks.

Companies that historically increase their quarterly cash payouts demonstrate that they can produce steady and reliable income for their investors during good times, downturns, and recessions.

Such stocks also offer an excellent means for beating inflation. Unlike bonds that pay fixed principal and interest payments, these companies provide a regular pay raise in the shape of dividends to boost your spending power. You can use that cash to reinvest and buy more shares or to meet your monthly expenses.

Below, we have compiled a list of three low-risk, high-quality names suitable for a long-term retirement portfolio.

1. Home Depot

  • 5-Year Average Dividend Growth Per Share: 19.4%
  • Dividend Yield: 2.44%
  • Payout Ratio: 45%

Home Depot (NYSE:HD) is in the perfect position to continue sending dividend checks to retirees. The home-improvement retailer, in recent years, invested heavily to prepare itself for the e-commerce onslaught and changing consumer behavior.

The stock currently offers a good entry point after losing 25% of its value this year.

HD Weekly Chart
HD Weekly Chart

Before the deadly pandemic hit, the Atlanta-based chain had completed an $11-billion restructuring plan to modernize its stores, upgrade digital options, and enhance offerings for its key trade customers.

Armed with these upgrades, Home Depot should remain in a growth cycle, especially when factors such as a hot real estate market and the changing ways people use their homes are fueling home-furnishing and improvement products.

The company is also a reliable dividend payer. Over the past five years, its quarterly dividend, on average, has expanded 19% per year. With an annual dividend yield of 2.44%, the company pays $1.9 quarterly per share.

HD Payout History
HD Payout History

Source: InvestingPro

2. Apple

  • 5-Year Average Dividend Growth: 10%
  • Dividend Yield: 0.54%
  • Payout Ratio: 14.7%

Apple Inc (NASDAQ:AAPL) is another large-cap stock that pays regular dividends with a very stable outlook. The iPhone maker’s cash and cash equivalents stockpile currently sits at nearly $180 billion, with only $14 billion in dividend expenses for each of the last three years.

Apple stock is just 4% lower for the year, while the tech-heavy NASDAQ 100 declined more than 15% during the same period.

AAPL Weekly Chart
AAPL Weekly Chart

With a payout ratio of just 14%, the Cupertino, California-based Apple has much room to continue providing income in both good and bad times through a powerful combination of increasing dividends and share buybacks. Over the past five years, Apple hiked its dividend by almost 10% yearly.

Moreover, in recent years Apple has been the biggest re-purchaser of its shares among companies listed on the S&P 500. The smartphone, personal computer, and wearables maker spent $85.5 billion to repurchase shares and $14.5 billion on dividends in its fiscal 2021, which ended in September.

This strength, along with solid earnings, is one of the main reasons Apple shares have remained less volatile in the current selloff of high-growth names.

3. Visa

  • 5-Year Average Dividend Growth: 19%
  • Dividend Yield: 0.7%
  • Payout Ratio: 21%

The global payment giant Visa (NYSE:V) is another solid pick for retirees who want to invest in less risky companies with a reliable dividend history. Visa has raised its annual payout for 13 straight years and has a lot of cash to continue making hikes comfortably.

Just in the past five years, Visa’s dividend per share growth, on average, has been close to 20% each year. During that period, the stock returned 112%, more than double what S&P 500 delivered.

Visa Monthly Chart
Visa Monthly Chart

As the travel economy recovers from the pandemic-related shock, Visa is in a great position to benefit from its massive economic moat. Visa is the largest payment processing network in the world. It has more than 100 million merchants worldwide, with more than $13 trillion in transactions going through its system in 2021.

Disclosure: The writer owns shares of Apple and Home Depot

3 Dividend Stocks That Could Provide Solid Income For The Rest Of Your Life
 

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3 Dividend Stocks That Could Provide Solid Income For The Rest Of Your Life

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Comments (8)
Mohd Izhar Muslim
Mohd Izhar Muslim Aug 14, 2022 8:30AM ET
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awesome, Thank you for sharing the article 💯
Max Dividend
MaxDividend Aug 12, 2022 12:38AM ET
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0.54% dividend yield per year is basically paying no dividend. There are conpanies in Brazil such as Petrobras paying solid 34% in sustainable dividend year after year and stock price also going higher in US dollars, so I see no reason to put my money in something that pays me bread crumbles as dividend.There are thousands of companies in Brazil paying above 20% in dividend year after year. That is where my portofolio diversification is going
Nick J
Nick J Aug 12, 2022 12:38AM ET
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yeah, but you have adr fees and transaction fees... pair that with geopolitics.. no ty
Nick J
Nick J Aug 12, 2022 12:38AM ET
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yeah, but you have adr fees and transaction fees... pair that with geopolitics.. no ty
Nick J
Nick J Aug 12, 2022 12:38AM ET
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yeah, but you have adr fees and transaction fees... pair that with geopolitics.. no ty
Diogo Braga
Diogo Braga Aug 12, 2022 12:38AM ET
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Brazil... ahahahahahhahaha
Jim Hernandez
Jim Hernandez Aug 11, 2022 10:35PM ET
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Haris, you have good bots following you... let me just say don't be naive and invest in companies which pay 0.54% and 0.7% dividend just for the sake of safe dividends. you can easily day trade 100k using 50k every day using MACD, RSI, and UO indicators and make $200 DAILY minimum. I'm not a bot and not selling anything here. just study the different indicators and use what you feel comfortable with. This isn't rocket science, although Haris Anwar and the host of others want you to believe you have no other options. Make your own decisions with your money. heck even $100/day would give you 25% on your money in one year. You don't know until someone like me tells you you can. Don't settle for pennies when you can have $$.
Olivia Galindo
Olivia Galindo Aug 11, 2022 10:35PM ET
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Jim which are your latest finds? I’d love to hear about them. Just getting started.Thanks
godstime festus
godstime festus Aug 11, 2022 10:35PM ET
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hello Jim, can you be my lifetime mentor... I want to be a day trader and I am tired of blowing accounts
ge Kret
ge Kret Aug 11, 2022 4:57PM ET
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TSLA TSLA TSLA
C e c h i e r i
Cechieri Aug 11, 2022 4:03PM ET
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These are solid picks... but not because of these penny dividends (minus tax on top pf that). Lol
Jasmina Janicijevic
Jasmina Janicijevic Aug 11, 2022 3:11PM ET
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I dont know much about stock trading, so i hope you will help me to earn something in future, thanks.
Ale Viajero
Ale Viajero Aug 11, 2022 2:58PM ET
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dividends income is minuscule.. you invest 10,000 dollars and tou get what? 10 dollars per year? lol, funny..
Christophins Treasures
Christophins Treasures Aug 11, 2022 2:44PM ET
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Not a lot of dividends to be expected with such low dividend yield. Average yield of your picks is 1.2%, not sustainable IMO
 
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