Remember Montgomery Ward, Lehman Brothers, and Pan Am? They were all well-known publicly traded companies that paid dividends. And they all went out of business.
Investors who bought those stocks counting on receiving steady dividends throughout their lifetimes were sorely disappointed. But not all stocks are like Montgomery Ward, Lehman Brothers, and Pan Am. Here are three dividend stocks that you can safely hold for decades.
1. AbbVie
AbbVie's (ABBV -4.58%) sales and profits are tanking due to biosimilar competition for Humira. But I think that the company's experience with Humira underscores why AbbVie is built to last.
Many companies would be in big trouble if their top-selling product lost its mojo. AbbVie, on the other hand, is demonstrating that it will weather the Humira storm just fine. The company already has two successors to Humira on the market -- Rinvoq and Skyrizi. It fully expects these two drugs will together generate greater peak sales than Humira ever did.
AbbVie knew that Humira would face patent expirations years in advance. The company did everything it could to hold off the inevitable. More importantly, though, it invested in development and acquisitions that put it in a position to continue succeeding even during Humira's sunset years.
The big drugmaker belongs to the elite group of stocks known as Dividend Kings with its track record of 52 consecutive dividend increases. AbbVie should be able to maintain that status going forward. And it should return to growth relatively quickly.
Sometime down the road, AbbVie will face other patent losses for key products. However, it's shown that it can navigate these challenges well. As I said, AbbVie is built to last.
2. Kenvue
You might not have heard of Kenvue (KVUE -0.84%), but I'd bet you know many of its products. The company spun off earlier this year from healthcare giant Johnson & Johnson. It markets what were J&J's consumer healthcare products, including iconic brands such as Band-Aid, Listerine, and Tylenol.
Let's look at just how long those products have been around. Band-Aid was developed in 1920. Listerine was already on the market for decades by then, with its creation in 1879. Tylenol is the new kid on the block, launching in 1955.
While Kenvue is technically a new company, its roots date back to Johnson & Johnson's founding in 1886. Thanks to its connection with Johnson & Johnson, Kenvue (like AbbVie) is a Dividend King. The company initiated a dividend soon after its spin-off.
CEO Thibaut Mongon stated at the time, "The dividend is an important component of our disciplined capital allocation strategy and our plan to deliver sustained value creation for all of our stockholders." I think that Kenvue's dividend will continue to flow and grow for a long time to come.
3. Verizon Communications
Verizon Communications (VZ 1.17%) is probably the best known of these three dividend stocks. The company stands as a leader in the telecommunications industry, offering voice, data, and video services across the world.
At first glance, you might think that Verizon isn't strong enough of a contender to last for decades. After all, the company was only founded in 2000. However, Verizon was formed via the merger of Bell Atlantic and GTE. Bell Atlantic was a "baby Bell" created by the breakup of AT&T, which itself began business way back in 1885. GTE was founded in 1926.
Verizon offers one of the most attractive dividends around with a yield of over 6.9%. The company has increased its dividend for 17 consecutive years, the longest streak in the telecommunications industry.
To be sure, Verizon has faced some challenges in the past. However, it appears to be on solid financial footing going forward thanks to its rapidly growing free cash flow. I fully expect that Verizon will remain at the top of the telecom industry decades from now.
