Want Decades of Passive Income? 2 Stocks to Buy Now and Hold Forever

There are advantages to holding onto dividend stocks for a long time, potentially forever. First, dividend stocks have historically outperformed their non-dividend-paying peers. Second, regularly reinvesting dividends allows the magic of compounding to do its work. That said, investors don’t wanna put their hard-earned money in just any dividend stock. Let’s consider two that are capable of maintaining a solid dividend program for a long time: Coca-Cola (KO 0.67%) and Walmart (WMT 1.33%).

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1. Coca-Cola

Coca-Cola has already been paying dividends for a long time – in fact, it has been raising them for more than six decades. The beverage giant is part of an elite group known as Dividend Kings. Those are companies that have increased their payouts annually for at least 50 consecutive years – Coca-Cola’s streak is at 63. That doesn’t guarantee that it will continue doing so, per se, but the Dividend King status is prestigious. Any member of this club will fight tooth and nail to stay in it since missing just one annual dividend hike means waiting another 50 years (at least) to get admitted again.

Now, it also helps that Coca-Cola has a resilient business. The consumer staples industry, which it is part of, sells essential goods that people keep buying even when the economy is down and the purse strings tighten. Coca-Cola also has individual advantages. Let’s consider three of them.

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NYSE: KO

Coca-Cola

Today’s Change

(-0.67%) $-0.52

Current Price

$77.36

Key Data Points

Market Cap

$335B

Day’s Range

$76.59 - $77.71

52wk Range

$65.35 - $82.00

Volume

6.7M

Avg Vol

18M

Gross Margin

61.75%

Dividend Yield

2.62%

First, it has one of the strongest, most recognizable brand names in the world, one that inspires trust and familiarity, attracts customers with little advertising, and consistently commands shelf space in major grocery stores. Second, Coca-Cola has a vast lineup of products. The company’s portfolio has something to offer practically everyone, regardless of their preferences.

Third, Coca-Cola is an innovative company. Consumer preferences can change quickly, and if Coca-Cola were unable to keep up with these shifts, it would not be nearly as successful a company. These factors (and others) explain why Coca-Cola has been able to perform well enough to raise its dividends every year for more than six decades, and since it still boasts these same qualities, we can expect the beverage maker to continue doing so for a long time. Coca-Cola is an excellent buy-and-hold stock for income-oriented investors.

2. Walmart

Walmart is also part of the group of Dividend Kings. The retail giant currently has 53 years of consecutive payout increases to its name. And it has the means to maintain its streak for a very long time. Walmart is one of the largest retailers in the world. Its sheer size and deep footprints across the U.S. grant it several advantages. The company leverages its scale to convince manufacturers to offer it low prices, which the retail giant can pass on to customers.

Walmart’s EDLP (Everyday Low Price) is one of the company’s most important strategic advantages, as it helps attract customers even during challenging economic times. Further, the company’s massive retail footprint means that the overwhelming majority – about 90% – of people in the U.S. are within 10 miles of one of its locations. That means shopping at Walmart is fairly convenient for most in the country – location is incredibly important in the retail landscape.

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NASDAQ: WMT

Walmart

Today’s Change

(-1.33%) $-1.67

Current Price

$123.45

Key Data Points

Market Cap

$997B

Day’s Range

$123.07 - $125.46

52wk Range

$79.81 - $134.69

Volume

678K

Avg Vol

31M

Gross Margin

25.40%

Dividend Yield

0.75%

Here’s another aspect of Walmart’s business that should help it succeed over the long term: the company has not been afraid to embrace new technology. Even as some legacy brick-and-mortar retail giants went out of business due to the rise of e-commerce, Walmart has become one of the leading e-commerce players in the U.S. E-commerce now represents an important long-term opportunity for Walmart. Its sales in that unit are growing faster than the rest of the business, while the company is slowly ramping up its advertising revenue.

Walmart is now also using artificial intelligence (AI) across its business. For instance, it has partnered with OpenAI to allow people to purchase items from Walmart directly in ChatGPT. While this initiative may not have a significant impact on Walmart’s results, it shows that the company is once again capitalizing on technological changes to improve its business. That’s an important reason the stock should perform well over the long run and maintain its fantastic dividend program.