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2 Dividend Stocks You Can Buy and Hold for the Next Decade

By Joe Tenebruso – May 3, 2020 at 9:45AM

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These outstanding businesses can reward you with rising cash income for many years to come.

There's something quite comforting about receiving a steadily growing stream of cash from your investments. Dividend stocks can be wonderful in this regard -- if you choose the right ones.

To help you do so, here are two companies that are particularly well-positioned to reward their investors with reliable cash payouts -- both today and well into the future.

Rolls of dollar bills rising in a stair-step manner

If you'd like to generate a rising stream of income from your investments, check out these dividend stocks. Image source: Getty Images.

Brookfield Infrastructure Partners

One of the keys to successful dividend investing is choosing businesses that operate in industries that will remain relevant for many years to come. Infrastructure certainly fits the bill -- and Brookfield Infrastructure Partners (BIP -3.16%) is the best in the business.

Brookfield owns a diverse collection of valuable infrastructure assets across the world in areas such as transportation, energy, utilities, and data. Think ports, pipelines, power lines, and cell towers. 

These assets produce bountiful cash flows, nearly all of which are secured via long-term contracts. This helps to insulate Brookfield from economic downturns, such as the one we're facing during the coronavirus pandemic. In turn, Brookfield is able to distribute much of its cash flow to investors, and its limited partnership units yield a hefty 5.5%.

Better still, Brookfield has a proven track record of growing its cash payout steadily over time. The company excels at finding value-creating acquisitions that generate strong returns for investors. With massive infrastructure investments likely to be a part of post-pandemic economic stimulus efforts in the U.S. and other nations, Brookfield should have little trouble reaching its goal of 5% to 9% annual distribution growth in the coming years. 

A high current yield and intriguing distribution growth prospects make Brookfield Infrastructure Partners the type of income investment that you can hold for the next decade, and investors who buy today should be well rewarded in the years ahead.

Microsoft

Like Brookfield, Microsoft (MSFT -0.32%) helps to build infrastructure, but its assets lie in the cloud. Microsoft 365, which includes cloud-based versions of its massively popular Word and Excel productivity apps, is experiencing increased usage during the COVID-19 crisis. The technology titan's Azure cloud infrastructure platform is also growing at a torrid rate during the pandemic, with revenue soaring 59% year over year in the third quarter. 

The coronavirus pandemic is helping to accelerate the shift to cloud-based computing. With many people working at home due to social distancing guidelines, companies are seeing firsthand the benefits of a distributed workforce. More businesses may choose to allow their employees to work from home even after the pandemic ends, which could produce significant operating cost savings for companies by lessening their need for expensive real estate holdings and leases. Microsoft's cloud computing services are helping to make this possible.

All told, Microsoft's cloud businesses helped to drive its third quarter revenue and operating income higher by 15% and 25%, respectively, to $35 billion and $13 billion. This is incredible growth for a $1.3 trillion behemoth.

Better still, Microsoft is committed to passing a sizable portion of its profits on to shareholders. Its shares currently yield 1.1%. The tech giant has raised its cash payout every year since 2010, and with its cloud businesses fueling its growth, investors can expect to receive a steadily rising stream of dividend income over the coming decade.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Microsoft. The Motley Fool recommends Brookfield Infrastructure Partners and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$248.40 (-0.32%) $0.80
Brookfield Infrastructure Partners L.P. Stock Quote
Brookfield Infrastructure Partners L.P.
BIP
$35.56 (-3.16%) $-1.16

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