2 relatively safe dividend stocks to buy today and hold forever

2 relatively safe dividend stocks to buy today and hold forever
2 relatively safe dividend stocks to buy today and hold forever

The longer you’re willing to hold a high-quality dividend-paying stock, the more years of passive income your portfolio will benefit from. But as savvy investors know, safe investments aren’t always easy to find, and there are plenty of risky stocks that probably won’t be able to keep paying their dividends for as long as you want them to.

With that in mind, there are at least two healthcare companies that are almost certain to deliver on their passive income promises over the next few decades. You may not beat the market with an investment in either, but if you just collect the money and sleep soundly at night, no matter what happens in the economy, they will both suit you.

1.Pfizer

Outraged Pfizerit is (DFP -0.17%) Comirnaty’s recent and highly successful coronavirus vaccine launch, its security as an investment stems from its huge pipeline of drugs for sale, which is itself fueled by a steady stream of new drugs coming to market over the past a given year.

The new drugs it plans to bring to market over the next two years are expected to generate up to $20 billion in annual revenue by 2030. And 11 of those newcomers could launch in 2023 alone, pending approval. regulatory.

Given that the company’s revenue over the past 12 months is approximately $99.9 billion, the projected amount of new revenue in 2030 might not seem like significant growth. And it’s entirely possible that by then revenue will decline, as it faces perpetual challenges from expiring exclusivity protections on its drugs that allow generic competitors to steal share. Steps.

But there’s often a trade-off between growth potential and stability, and Pfizer is definitely a stock that tends toward stability, even in light of its ongoing battle for market share.

At the same time, it has been mindful of its dividend, which it has increased by 71% over the past decade. And with a payout ratio that’s barely 30% of earnings, management can probably continue to increase the dividend in a sustainable way. If you buy Pfizer stock and hold it forever, you’ll likely reap the rewards of the company’s pipeline successes over time and also benefit from its ongoing stock buybacks.

2.Becton, Dickinson

You may have never heard of Becton, Dickinson (BDX -1.01%)but if you’ve ever received medical care, chances are you’ve contributed to demand for some of its vast selection of medical products.

In addition to making boring but essential products like syringes, test tubes and catheter sets, it also makes high-tech equipment like anesthesia workstations and analytical devices for research labs. biomedical. In total, it grossed more than $4.7 billion in the fourth quarter alone, about half of which came from its medical products segment.

Demand for this crucial medical equipment isn’t going to drop any time soon, nor will demand for its more esoteric offerings of disposable medical products needed to provide hospital care.

And while the company constantly has to spend money developing new products, it’s not about to embark on an innovation arms race with a competitor for many medical or research products. base it sells, as there are only a limited number of additional features. something like a test tube can have.

Plus, such a mix of disposables and hard assets means he generates plenty of recurring revenue every quarter, which in turn gives him the steady cash flow he uses to pay his dividend for years and years.

For each of the past 51 consecutive years, management has increased the dividend, making the company a dividend king. And since the end of 2013, his payout has increased by 84%, while his quarterly FCF has increased by 373%. So there seems to be more than enough growth to warrant continued dividend hikes.

As long as Becton, Dickinson continues to develop and manufacture products the medical system needs to deliver care, it will be lucrative stock to hold for years to come.

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