Want Decades of Passive Income? 3 Stocks to Buy Now and Hold Forever

Investing for passive income is a popular strategy among investors seeking long-term financial independence. By focusing on dividend growth stocks, you can generate a steady stream of income that increases over time. Here are three stocks with strong historical dividend growth rates and attractive payout ratios, making them ideal for a buy-and-hold strategy:

1. Johnson & Johnson (JNJ)
- Dividend Growth Rate: 5.6% (5-year average)
- Payout Ratio: 54.5% (TTM)
- JNJ has a long history of dividend growth, with a 59-year streak of annual increases. Its stable earnings and strong balance sheet make it an attractive choice for income investors.

2. Coca-Cola (KO)
- Dividend Growth Rate: 7.1% (5-year average)
- Payout Ratio: 68.2% (TTM)
- KO has raised its dividend for 59 consecutive years, making it a Dividend King. Its diversified product portfolio and global reach provide a solid foundation for continued dividend growth.

3. Procter & Gamble (PG)
- Dividend Growth Rate: 6.1% (5-year average)
- Payout Ratio: 58.7% (TTM)
- PG has increased its dividend for 64 consecutive years, making it another Dividend King. Its broad range of consumer products and strong brand portfolio support consistent dividend growth.

These three stocks offer attractive dividend growth rates and payout ratios, making them well-suited for a buy-and-hold strategy. By investing in these companies, you can generate decades of passive income while benefiting from the growth of their businesses.

When comparing these stocks' dividend yields to other income-generating investments, such as bonds or real estate investment trusts (REITs), it's essential to consider the stability and growth potential of the income stream. As of 2024, the average dividend yield for the S&P 500 is around 1.5%. Johnson & Johnson (JNJ) has a dividend yield of 2.41%, Coca-Cola (KO) has 2.90%, and Procter & Gamble (PG) has 2.64%. In comparison, the 10-year Treasury yield is approximately 2.5%, and the average yield for REITs is around 3%. While these stocks' yields are lower than REITs, they offer a more stable income stream and have historically shown less volatility. Additionally, these companies have a long track record of increasing their dividends, providing a hedge against inflation.



In conclusion, investing in dividend growth stocks like Johnson & Johnson (JNJ), Coca-Cola (KO), and Procter & Gamble (PG) can provide decades of passive income. These companies' strong historical dividend growth rates and attractive payout ratios make them well-suited for a buy-and-hold strategy. While their dividend yields may be lower than other income-generating investments, their stable income streams and potential for growth make them an attractive option for long-term investors.