Safe, growing dividends.
Stocks that pay safe, growing dividends tend to make for excellent long-term investments.
Why?
Because it takes a special kind of business to be able to reliably grow their profit enough to fund safe, growing dividends.
And safe, growing dividends can make for excellent passive income.
Dividends are the most passive form of income I’ve ever come across.
You don’t need to show up anywhere, do any kind of work, call anyone, fulfill a quota, or really do anything at all in order to collect dividends.
All you need to do is hold stock in a company that pays them.
But as great as dividends can be, it’s vitally important to invest in safe, growing dividends.
If you’re relying on dividends to live off of, you want to make absolute certain that this income is as reliable as it possibly gets. The last thing you’d want to do is have to go back to work because your dividend income evaporated.
And you want to make sure that dividend income can at least keep up with rising expenses.
With that in mind, I want to share with you three stocks that are paying safe, growing dividends right now.
The first stock is Johnson & Johnson (JNJ).
This is one of the safest dividends I know of. It’s one of the bluest blue-chip stocks you can find. This company’s dividend resume is stellar.
Check this out. They’ve increased their dividend for an astounding 58 consecutive years. That should tell you something about how safe the dividend is. If it weren’t safe, it wouldn’t have increased for 58 years in a row.
Just in case there’s any doubt, the company is guiding for $9.50 at the midpoint in adjusted EPS for this coming fiscal year. And the dividend is currently only $4.04 per share annually.
What does that tell us?
It tells us another dividend increase is coming in 2021, just like the last 58 years.
And the growth isn’t anything to sneeze at: The ten-year dividend growth rate is 6.6%.
With the stock yielding 2.5%, that’s an appealing combination of yield and growth.
This company is a healthcare giant. Its operations span pharmaceuticals, medical devices, and consumer products.
For many good reasons, this is one of my top 5 stocks for 2021.
The second stock for safe, growing dividends is Microsoft Corporation (MSFT).
This dividend is so safe, I’ve dubbed it the safest dividend in the world.
Microsoft’s dividend is so safe, the company could stop earning a profit and still continue to pay a dividend for years and years to come.
How? The company has over $130 billion in total cash on the balance sheet.
And the dividend ran them less than $16 billion last year. They have almost a decade’s worth of the dividend – in cash!
But we don’t have to worry about that, because Microsoft practically prints money.
From Microsoft OS to computers to Azure cloud, this company is a tech juggernaut.
Their net income over the last year is bumping over $50 billion, which easily funds the dividend.
While the stock only yields 1% right now, this is really more about safety and growth than income. Growth, by the way, is stellar.
The 10-year dividend growth rate is 14.1%. They’ve increased the dividend for 19 consecutive years, and they’re just getting warmed up.
If you’re a young investor — say, under the age of 40 — Microsoft needs to be in your portfolio. That’s the bottom line.
The third stock I want to share with you is Realty Income Corp. (O).
If Microsoft’s low yield just isn’t interesting to you, this stock should get the job done.
After all, it yields a monstrous 4.6%. That’s almost three times higher than what the broader stock market offers!
Wanna know something even cooler about this dividends?
It’s paid monthly. That’s right. This company hands out a dividend every month. If you’re living off of dividend income, that regular stream of income makes budgeting super easy.
More importantly, it’s a safe, growing dividend.
They’ve increased their dividend for an impressive 28 consecutive years, which dates back to their initial IPO.
The 10-year dividend growth rate is 4.9%, so this isn’t just a yield story here.
That track record screams safety.
Furthermore, funds from operations/share came in at $0.81 for the most recent quarter, easily covering the monthly dividend of under $0.24/share.
This company is a real estate giant. It’s exposed to everything from pharmacies to gas stations to grocery stores.
And just in case you think real estate is in trouble, don’t. The company is collecting nearly 100% of billed rent, and the most recent quarter showed a year-over-year revenue increase.
If you want a big monthly dividend that’s safe and growing, look no further than Realty Income.
— Jason Fieber
P.S. If you’d like access to my entire six-figure dividend growth stock portfolio, as well as stock trades I make with my own money, I’ve made all of that available exclusively through Patreon.
