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Have $1,000? 2 All-Weather Dividend Stocks to Buy and Hold Forever

By Rachel Warren – May 29, 2021 at 6:20AM

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These unstoppable stocks can add growth and value to your portfolio for decades.

With the state of the market lately, you're not alone if you find yourself looking for stocks that can help guide your portfolio to safe harbor if another correction or crash occurs. By keeping your eye on the long-term horizon and investing only in high-quality companies that align with your overall investment goals, you can reduce the incidence of volatility in your portfolio and better shield your holdings from adverse market headwinds.

If you have $1,000 to invest in stocks, here are two golden eggs with robust dividend yields to add to your buy basket right now.

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1. Johnson & Johnson

Johnson & Johnson (JNJ -0.31%) is one of my favorite healthcare stocks of all time for a few reasons. First, there's the juicy dividend it pays -- 2.4% at the time of this writing, which is well above the S&P 500's average of around 1.5%. And the company's yield isn't the most impressive thing about its dividend, either. Johnson & Johnson is one of a special group of stocks called Dividend Kings. A company has to increase its dividend every year for 50 years to snag that title. Johnson & Johnson has consecutively raised its payouts for nearly 60 years.

Another reason for long-term investors to love Johnson & Johnson is the strength of its core businesses, which have enabled it to consistently deliver steady balance sheet and share price growth. Johnson & Johnson has been in business for 135 years. It generates revenue from its pharmaceutical products, consumer health products, and medical devices. With names like Neutrogena, Aveeno, Tylenol, Motrin, Benadryl, and Listerine counted among its vast family of brands, not to mention top-selling medications like multiple myeloma drug Darzalex and plaque psoriasis treatment Stelara, it's no surprise that Johnson & Johnson has remained a resilient value play throughout the economic crisis of the last year.

Johnson & Johnson grew its top line by around 1% in 2020 despite a huge lag in medical device sales during the pandemic. The company marked a particularly strong period of growth in the fourth quarter, when its total sales grew 8.3% year over year. The company's financial results for the first quarter of 2021 showed that the company is making a quick rebound from pandemic-related slowdowns, with total sales during the three-month period surging 7.9% year over year and earnings per share (EPS) jumping 6.9%.

Management is projecting that adjusted operational sales will grow by more than 9% in 2021, while analysts are projecting that the company will deliver consistent average annual earnings growth in the upper single digits for the next five years alone. Johnson & Johnson's growth story isn't one of lightning fast returns, but rather of gradual but consistent gains over time. Investors who stick to a long-term buy-and-hold strategy can reap the rewards of profitability and stability by adding this gem of a value stock to their portfolio.

2. Procter & Gamble

Procter & Gamble (PG -0.69%) is another name in the elite group of stocks known as Dividend Kings. Its dividend yields just over 2.3% based on current share prices. The company's track record of raising its dividend outpaces even that of Johnson & Johnson; Procter & Gamble has a whopping 64 consecutive years of dividend increases to its name. The company just announced a 10% hike to its quarterly dividend on April 13.

Procter & Gamble owes its continued resilience and growth in all manner of market environments to its portfolio of household name brands, which feature in-demand, essential products that millions of people around the world use on a daily basis. These include well-known brands like Downy, Bounce, Tide, Bounty, Charmin, Gillette, Head & Shoulders, Pantene, Mr. Clean, Swiffer, and Crest, among many others.

Procter & Gamble calculates its fiscal year a bit differently than most companies. It's already reported financial results for the first three quarters of fiscal 2021 (ended Sept. 30, 2020, Dec. 31, 2020, and March 31, 2021). During these quarters, Procter & Gamble reported year-over-year net sales increases of 9%, 8%, and 5%, respectively. In particular, consistent and elevated demand for products in its beauty, grooming, healthcare, and fabric/home care segments continue to drive sustainable balance-sheet growth. For example, these four business divisions generated year-over-year net sales spikes of 7%, 4%, 3%, and 7%, respectively, in the third quarter alone.

The company is also in a great position from a cash perspective. Procter & Gamble generated more than $4 billion in operating cash flow in the third quarter of its fiscal 2021 alone, and it closed the three-month period with roughly $10 billion in cash and cash equivalents on its balance sheet. It also used $2 billion of its cash flow to satisfy dividend payments during the quarter.

Procter & Gamble is a tried-and-true value play for the long-term investor. The stock won't deliver super-fast gains to your portfolio, but the persistent stability and growth it lends make Procter & Gamble a compelling buy to have in your basket in both bull and bear markets.

Rachel Warren has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$165.11 (-0.31%) $0.51
Procter & Gamble Stock Quote
Procter & Gamble
PG
$129.20 (-0.69%) $0.90

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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