The magic of dividends is that you don't need to do anything to earn them aside from holding the stocks that pay them. Someone who accumulates enough dividend stocks could live off their portfolio's passive income stream and never have to work another day in their life. The trick is finding the right stocks. There aren't many businesses that can deliver decade after decade.
That said, the healthcare industry is a great place to look for such companies. Healthcare spending is in the trillions of dollars annually in the United States alone, and the desire for better care and more of it is only expanding as the world's population grows and the median age rises.
Here are five proven healthcare winners that can deliver decades of passive income. Nothing is truly forever, but these stocks are about as close as you can get.
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1. Johnson & Johnson
It's hard not to start with Johnson & Johnson (JNJ -0.02%). The stock is a Dividend King with a streak of 62 consecutive annual dividend increases. It's among the world's leading developers of pharmaceuticals, medical devices, and products. It's an industry titan with a fortress-like balance sheet that enables it to balance dividend increases with strategic acquisitions and product development, driving steady growth.
At its current share price, the stock offers a solid 3.5% dividend yield, and its payout ratio is a cozy 49% of 2025 earnings estimates. Johnson & Johnson is growing earnings at a mid-single-digit percentage pace annually, so it won't make you rich quickly. However, reinvest those dividends, and your Johnson & Johnson holding could eventually become a cash cow for your portfolio.
2. Abbott Laboratories
The Dividend Kings club is a small group, but it includes another long-standing industry giant: Abbott Laboratories (ABT -2.71%). That company has raised its dividends annually for 53 consecutive years. After spinning off its pharmaceutical business as AbbVie over a decade ago, Abbott has centered its business around medical devices for cardiovascular and diabetes patients, as well as diagnostics and consumer nutrition products.
Abbott should remain a dependable dividend payer for years to come. At the current share price, its yield is just under 1.8%, but investors can expect some notable dividend increases in the near future. Analysts expect Abbott to grow its earnings by 10% annually over the next three to five years, and the payout ratio is only 45% of 2025 earnings estimates.
3. Cardinal Health
Some of healthcare's most essential players operate behind the scenes. Cardinal Health (CAH 1.14%), for example, is a global distributor of pharmaceuticals and healthcare products to hospitals, care providers, and patients.
The company has also built a strong reputation as a dividend stock, with 30 consecutive years of payout hikes. The stock yields 1.2% at its current share price, but there is considerable room for management to increase the dividend. Its payout ratio is barely a quarter of this year's estimated earnings, and analysts project nearly 11% annualized earnings growth over the next three to five years.
Cardinal Health is an excellent stock for investors who have time to let those dividend increases stack up for a couple of decades.
4. West Pharmaceutical Services
Another under-the-radar name, West Pharmaceutical Services (WST -0.91%), designs and sells delivery systems for injectable medicines. Its products include stoppers and plungers in injection devices, wearable injectors, and injection pens. The company's business has gradually shifted from standardized offerings to more advanced, proprietary products that carry higher profit margins.
That bodes well for the company's dividend, which it has already raised for 32 consecutive years. Additionally, the dividend payout ratio remains at only 13% of 2025 earnings estimates, and the business is poised to grow at a mid-to-high single-digit percentage pace. So, while its current yield is just 0.4%, investors can expect their payouts to rise steadily for many years to come.
5. Medtronic
Closing out this list is medical device and equipment giant Medtronic (MDT 0.51%). It specializes in products and equipment used by patients and healthcare professionals for a wide range of conditions and care categories. The company is on course to become a Dividend King, with management's dividend-hiking streak currently at 47 years. The stock also offers a solid yield of 3.2% at the current share price.
Medtronic's diverse product portfolio and history of continuous innovation have driven its consistent growth for generations. Today, the company has nearly 200 clinical trials underway and over 43,000 active patent matters. The dividend remains safe with a comfortable 50% payout ratio, while analysts expect annualized earnings growth of 6% to 7% moving forward. Investors who buy and hold Medtronic can expect more of what the company has already delivered for decades now.
