Stocks to buy

3 Dividend Stocks to Buy for Passive Income Stream in Retirement

Identifying reliable dividend stocks can be challenging, but they offer potential long-term investment opportunities. Companies with a track record of consistent dividend growth in stable or growing industries are particularly attractive. Dividends have historically played a significant role in overall market returns. 

However, it’s important to acknowledge that no stock’s future earnings can be predicted with certainty. Including dividend stocks in a diversified investment strategy can help capitalize on market changes while minimizing risks. This article highlights three successful dividend stocks that warrant consideration for income-focused portfolios.

Realty Income (O)

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San Diego-based Realty Income (NYSE:O) is a reputable real estate investment trust and a member of the Standards and Practices 500 Dividend Aristocrats Index. This index comprises companies that have consistently increased their dividend payouts for 25 consecutive years. With more than 12,000 properties under long-term net lease agreements, Realty Income ensures reliable dividend payments. As a REIT, it is obligated to distribute at least 90% of its taxable income to shareholders, making it an appealing choice for dividend growth investors.

Realty Income offers a high dividend yield, a rare occurrence for the stock in the past decade. The company has a strong track record of consistently raising dividends for more than 25 years, a feat that many companies struggle to achieve. Additionally, Realty Income has maintained a dividend payment for more than 50 years and prioritizes diversification to minimize risk. Diversification is crucial when investing in REIT stocks for income.

Coca-Cola (KO)

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Coca-Cola (NYSE:KO) is an attractive investment option with its combination of income, stability, and growth potential. The company has a longstanding track record of reliable dividends since 1963. With a low Beta of 55 cents, Coca-Cola offers stability and acts as a hedge against market volatility. Despite inflationary pressures, Coca-Cola continues to experience steady growth and has exceeded historical profitability averages. The company is expanding into the alcoholic beverages sector through strategic acquisitions and product introductions, making a significant impact in the premium spirits market.

With profitability exceeding historical averages, the renowned non-alcoholic beverage giant is venturing into the alcoholic beverages sector. Through strategic acquisitions and the introduction of innovative products like ready-to-drink Jack Daniels and Coke cans, Coca-Cola is making significant strides in the premium spirits market.

Chevron (CVX)

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Despite the focus on renewable energy, it is important to recognize the enduring value of hydrocarbon energy giants like Chevron (NYSE:CVX). Fossil fuels possess high energy density, making them difficult to replace entirely. While the rise of electric vehicles presents a challenge, the efficiency of combustion-powered cars using gasoline remains unmatched in terms of mileage per volume.

On the other hand, in the changing energy landscape, big oil stocks like Chevron have managed to generate solid profits. Chevron reported strong earnings per share in the first quarter of 2023 and is expected to see further growth for the full year. The company prioritizes its shareholders through share buybacks, which have pleased investors like Warren Buffett. Chevron’s financials show a healthy cash balance, manageable debt, and a respectable dividend yield. With 36 consecutive years of dividend payments, Chevron is committed to delivering value to its shareholders.

On the date of publication, Chris MacDonald has a position in KO. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.