3 Top Dividend Stocks That Will Pay You Dividends Forever

Investing in leading consumer brands can be a rewarding dividend investing strategy. History shows that famous brands tend to stay that way for many years and continue to grow.

Some of the best income investments may be companies you shop regularly, which can give you insight into the company’s competitive position that people on Wall Street don’t fully understand.

To give you some ideas, read why three Motley Fool contributors believe this. costco wholesale (expense 1.68%), Starbucks (sub 0.72%)and home depot (HD -0.55%) It can continue to pay dividends for decades.

solid business model

Jeremy Bowman (Costco Wholesale): It’s hard to think of a more powerful business model than Costco.

Warehouse retailers have a reputation for selling high-quality bulk items at low prices. The membership model provides a steady stream of income regardless of your retail performance. In fact, the company earns most of its revenue from membership fees.

Costco also regularly has the highest customer satisfaction ratings in the retail sector, and customers regularly rave about its low prices, wide selection, and high quality merchandise. As of fiscal year 2023, the membership renewal rate was 92.7% and 90.4% globally.

We continue to add new members and increase comparable sales.

As a dividend payer, Costco’s 0.6% yield won’t surprise anyone, but the company has been increasing its dividend by at least 10% almost every year since it began paying dividends in 2004. More importantly, it has a history of rewarding investors. It pays generous special dividends every few years. It paid a dividend of $15 per share earlier this year, giving it a yield of about 2%.

Costco also appears to be a good bet that could pay off in perpetuity, as the company has withstood several threats and emerged stronger. To combat the threat, we have started offering several e-commerce options. AmazonIt has performed well during recessions and even pandemics, as its reputation for affordable prices makes it an attractive option during difficult times.

Lastly, Costco, unlike most retailers, continues to open new stores, showing that there is still ample demand for its services and room for penetration.

Over the next generation, Costco seems like a solid bet to continue growing and increasing its dividend.

The Best Coffee Brands Deliver Delicious Yields

john ballard (Starbucks): Investing in proven consumer brands that have been growing their dividends for a long time can create a solid dividend investing strategy.

The reason it’s a good time to buy Starbucks stock right now is because it’s selling due to concerns about short-term growth. The stock recently fell after the company issued a weak outlook for sales. This will not have a negative impact on your business. Instead, it reflects near-term headwinds in consumer spending that are also affecting other consumer goods companies.

Starbucks reported an unusual 2% year-over-year decline in sales last quarter. But the stock sell-off means investors can buy this top dividend payer at its highest yield in years.

Starbucks is a time-tested brand that has gone through many economic hardships over the years. Founded in 1971, it now has more than 38,000 stores worldwide. It’s a great business that generates consistent revenue by serving people every day.

The stock currently pays a quarterly dividend of $0.57 per share, bringing its dividend yield to 2.92%. Additionally, the company has increased its dividend every year for over 10 years. The business continues to generate healthy profits to fund its dividend, even if earnings continue to be weak in the near term. Given its strong brand and opportunities to expand internationally, it should pay dividends over a longer period of time.

Reinvesting Dividends Can Earn High Profits

Jennifer Cybill (Home Depot): Home Depot operates 2,300 brick-and-mortar stores in North America and has a strong digital business. It’s not as big as I thought. walmart Or Amazon, but that stock boasts gains comparable to those two top stocks over time. Even if you make a small initial investment, you will make much more money if you reinvest all the dividends over several decades.

This isn’t Home Depot’s finest hour, but in some ways it’s the best time to see how well it can perform under pressure. Sales and profits are down, but not by much. Sales were down 2.3% from last year, and earnings per share (EPS) were down from $3.82 to $3.63.

Home Depot is adept at leveraging efficient operations, a strong logistics network, strong brands, and an omnichannel organization to generate customer engagement and sales. In an inflationary atmosphere, what customers are ignoring are high-priced items. Overall comparable transactions were down 1.5% this quarter, and transactions over $1,000 were down 6.5%.

Home Depot shares are down about 3% this year. This makes sense because stocks tend to move in line with performance. If earnings decline and the stock price does not fall, the valuation will increase. However, as the economy improves, sales and earnings will easily recover, which creates a buying opportunity.

If investors buy today, they can get the stock at a good price and also benefit from the highest dividends and high yields. At current prices, Home Depot stock has a dividend yield of 2.6%, nearly double the S&P 500 average. Home Depot has paid dividends since 1987 and has raised its dividend every year since 2010. It’s increased 850% since then, and that’s the dividend. If you invested $1,000 back then, you would now have more than $16,000, or $5,000 more than the price increase.

Home Depot is a top dividend stock with a great business model, plenty of cash, and a commitment to creating shareholder value.