Best Dividend Stocks to Buy and Hold for the Next 10 Years
Ah yes, dividend stocks, the tried and true way of building wealth. These are companies that pay a portion of their earnings to shareholders. Thus, I’m going to detail the best dividend stocks to buy and hold over the next ten years to help you build your portfolio with solid companies.
Seeing that inflation fears are pushing the 5-year breakeven rate to its highest level since 2004, there’s never been a better time to start looking for dividend stocks to watch.
Bond traders are betting interest rates will rise, and growth slows. Should you be concerned? To ensure your portfolio is ready for a slowdown, let’s cover the best dividend stocks to buy and hold over the next ten years.
The Best Dividend Stocks to Buy and Hold List
If you’ve overlooked dividend stocks up to this point, you’re missing a huge opportunity to build wealth. In fact, research shows 84% of the total returns from the S&P 500 since 1970 are from compounding dividends.
With that in mind, I present the best dividend stocks to buy and hold over the next ten years.
- Coca Cola
Dividend stocks may not seem like the most exciting investment opportunity. Yet, they are an essential part of the compounding process.
#5 NIKE (NYSE: NKE)
- Market Cap: 263B
- Dividend Yield: 0.66%
- 1 Year Return: 35%
Nike is an industry leader with strong brand loyalty. The loyalty has helped the company navigate through the pandemic with higher direct sales. In fact, direct sales grew 28% YOY to $4.7 billion in Nike’s latest earnings.
Although Nike has been acting like a growth stock, growing over 150% since its low in March ’20, it still offers an attractive dividend. The 0.66% yield may not seem like much, but it’s due to the relative growth of NKE stock.
Additionally, Nike is in the midst of a four-year, $15 billion share repurchase program. Since 2018, Nike has repurchased $5.4 billion worth of stock.
Nike’s superior partnerships with big leagues like the NFL and NBA have helped them maintain their position as the largest sportswear distributor.
#4 Coca-Cola (NYSE: KO)
- Market Cap: 242B
- Dividend Yield: 2.99%
- 1 Year Return: 15.53%
Coca-Cola is one of the most well-known companies in the world. As a matter of fact, “Coca-Cola” is the second-most understood term globally behind “okay.”
If that’s not brand power, I don’t know what is. But, in reality, Coca-Cola is an industry leader with well-established revenue streams. Therefore, Coca-Cola has been able to increase its dividend for the 59th straight year.
Currently offering an attractive 2.99% dividend yield, Coca-Cola is one of the best dividend stocks to buy and hold over the next ten years.
Not only that, but the company is investing in furthering the companies market share. Coca-Cola is poised for solid growth with new products in high-growth categories like coffee, energy drinks, and hard seltzer.
#3 Lowes (NYSE: LOW)
- Market Cap: 164B
- Dividend Yield: 1.38%
- 1 Year Return: 45%
The “home improvement warehouse,” Lowe’s is having itself a great year. Despite sky-high lumber prices, supply chain problems, and labor challenges, Lowes is up 45% this year alone.
With home improvement sales exceeding 400 billion in the past two years, Lowe’s business is booming. Not only that but it’s expected to continue increasing to over $500 billion by 2024. On top of lower lumber prices, the higher demand should help Lowe’s continue growing its profits.
Additionally, Lowe’s is expanding its digital presence with a 7% growth in online sales, on top of the 135% experienced last year.
Looking ahead, Lowe’s is in an excellent position in its industry, with strong profit margins and a healthy cash position.
Keep reading to discover the best dividends stocks to buy and hold for the next ten years.
#2 Target (NYSE: TGT)
- Market Cap: 127B
- Dividend Yield: 1.4%
- 1 Year Return: 67%
Target is often an overlooked dividend stock. Despite its 1.4% yield, it’s also growing and delivering returns to investors.
The specialty retailer has carved out a unique market for itself over the past several years. Through strategic investments and smart execution, Target is outperforming its peers.
In its Q2 earnings, Target saw an increase of 8.9% in comp sales, on top of the +24% achieved last year. Not only that, but Target’s e-commerce business is also thriving, growing over 200% in the past two years.
Target’s partnerships with Ulta Beauty (NASDAQ: ULTA), Starbucks (NASDAQ: SBUX), and Apple (NASDAQ: AAPL) continue to drive traffic into the store. And on top of this, the company’s flawless execution of curbside pickup is making it so customers don’t even have to enter the store to grab all their favorites.
And above all, Target’s superior business model is helping to improve margins, making it more profitable. For this reason, Target is one of the best dividend stocks to buy and hold for years to come.
Topping Out the Best Dividend Stocks to Buy and Hold -#1 CVS Health (NYSE: CVS)
- Market Cap: 119B
- Dividend Yield: 2.21%
- 1 Year Return: 56%
Another overlooked dividend stock is CVS Health. The healthcare retailer is changing the way healthcare is done in America. The company’s new Aetna partnership shows the retailer is committing to offering affordable healthcare to markets that need it the most.
Additionally, CVS is stepping up to help offer Covid testing and screening. As a result, the company is seeing increasing store traffic. And on top of this, they are converting the additional traffic into service users, particularly prescriptions. Total prescriptions filled increased 14.2% YOY to 394.4 million.
The increased adoption of CVS’s services is promising for its potential to continue expanding into additional revenue streams.
For that reason, the company is raising its expectations for its full-year results. If CVS can keep delivering on its expansion strategy, investors should continue to reap the benefits.
Best Dividend Stocks to Buy and Hold – Investing in Growth
Although these are some of the best dividend stocks to buy and hold, you can expect more from these companies. As they have shown over the past year or so, their business models are solid, and when needed, they can adapt to just about anything.
These are all excellent traits to look for in companies you plan on investing in for the long term. And as I have noted, dividends are a crucial part of the investment process.
Dividends will help you compound your wealth, earning you more in the long run. With that said, adding a few of the best dividend stocks from this list can help you do just that. These companies are well established, with strong cash flows designed to reward investors.
If you want more of the best dividend stocks to buy and hold, look no further than Wealthy Retirement. The “Dividend King” himself, Marc Lichtenfeld, is a master of the steady, reliable science of income investing. Join Today!
About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.