Brad Thomas
Founder & Lead Analyst of Wide Moat Research
Durable dividend stocks such as Johnson & Johnson, Coca-Cola, Realty Income, PepsiCo, Procter & Gamble, Sherwin-Williams, Visa and Federal Realty can become a lifetime income machine. The key is owning businesses so durable that investors sleep well while dividends and compounding do the work, rather than chasing yield. x.comÂ
Broadcom, Visa, Mastercard, Microsoft, JPMorgan, Costco, Apple, Home Depot, Lowe's, American Express and the DGRO, VIG and SCHD ETFs suit a dividend growth strategy, the best way to live off dividends. Payouts growing 5-8% a year can outpace inflation, and living on dividends means never selling in a crash. Steady dividend raises filter for stable cash flows, quality and solid management, dividends are easier to forecast than prices, and reinvesting them before retirement compounds share count. … Show more
Qualcomm, Johnson & Johnson, Wendy's, IBM, Coca-Cola, PepsiCo and Caterpillar are steady dividend payers that pay investors to wait, in keeping with Warren Buffett's rule never to lose money. Johnson & Johnson, Coca-Cola and PepsiCo have raised their dividends for decades. Qualcomm licenses wireless patents nearly every phone maker pays for, IBM leads in quantum computing research, and Caterpillar is a growing supplier of power generation for data centers. x.com x.com x.com x.com x.com x.com … Show more
Coca-Cola's retained earnings do little for shareholders when management does not distribute much of the growth. At 27 times earnings, a 2.3% yield with no expected large dividend hikes, special dividend or meaningful buybacks makes look-through earnings a poor basis for the price: EPS rose about $1 in five years while dividends rose only 52 cents. x.com x.com x.com x.comÂ
PepsiCo is an easy buy for a long-term dividend portfolio because its diversified brands can adapt to shifting health trends. Gatorade, soda, snacks and energy drinks are categories people will never stop consuming, and the recent Poppi purchase shows that adaptability, making PepsiCo preferable even to McDonald's. @TheRonnieVShow notes the stock sits on a 17-year trendline that has held since 2009. x.com x.comÂ
JEPQ, Canadian Natural Resources, Canadian Pacific Kansas City, Coca-Cola and VICI Properties combine high yield with dividend growth in a simple, diversified income portfolio yielding about 6.17%. JEPQ gives Nasdaq exposure with monthly dividends, Canadian Natural is an energy leader and Canadian Pacific Kansas City a literal railroad monopoly, while Coca-Cola and VICI offer super-predictable cash flows from soda and Las Vegas real estate. x.comÂ
Coca-Cola's $20 billion-plus tax liability under litigation is significant for a low-margin business; a billion-dollar tax penalty helped sink VF Corp. The stock has lagged the S&P 500 even from the best entries of the past 15 years, having run out of growth since globalization peaked, and its 2.67% dividend is weak against safe, growing alternatives. Spinning off and reacquiring bottlers has handed the alpha to others. x.comÂ
Procter & Gamble's steadily rising dividend shows why boring pays through downturns. It raised its dividend for the 70th straight year in April; the annual payment rose 5.7 times from $0.76 per share in 2001 to $4.36 today, about 7.2% a year through the dot-com crash, 2008, Covid and 2022. It returned $3.9 billion to shareholders in one quarter, while semiconductors are 27% below their high. x.comÂ
Dividend growth stocks have quietly outperformed the S&P 500 for decades, making Broadcom, Visa, S&P Global, Costco, Mastercard, Texas Instruments, Microsoft, PepsiCo, Starbucks and NVIDIA ten to buy and hold forever. x.com x.com x.com x.com x.com x.com x.com x.com x.com x.comÂ
Realty Income is no longer interesting because, as a net-lease landlord, it earns only a thin financing spread, roughly a 5% dividend, which rising rates will squeeze further. It uses its capital scale to buy land and lease it back to operators. Its data-center move, $1.9B of a $6.7B commitment with partners including Digital Realty, uses the same spread model, and REITs accepting such spreads erode data-center leasing profits. Vertically integrated businesses are riskier but more worthwhile. … Show more
Alphabet, Amazon, Apple, American Express, Coca-Cola, McDonald's, JPMorgan Chase and UnitedHealth are stocks worth holding forever. They aren't the flashiest names and won't deliver the best returns, but they offer consistency and can be counted on to keep growing for decades. x.com x.com x.com x.com x.com x.com x.com x.com x.comÂ
