If you're on the hunt for a reliable source of passive income, consider dividend stocks. These companies pay a portion of their earnings to investors, usually on a quarterly basis.
But that's not the only benefit. According to a study by Hartford Funds, companies that consistently pay and increase dividends delivered better returns with lower volatility than their counterparts that don't offer dividends.
If this appeals to you, here are three income stocks to buy and hold for the next decade and beyond.
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This real estate stock pays investors monthly
Realty Income (O +0.49%) is one of the largest publicly traded real estate investment trusts (REITs) in the U.S. and a highly appealing dividend stock for investors looking to earn passive income. What makes Realty Income appealing is that it pays monthly dividends and offers an attractive annual yield of 5.2%.
NYSE: O
Key Data Points
The company owns numerous single-tenant commercial properties under long-term triple net lease agreements. These leases provide it with stable recurring income while making tenants responsible for variable expenses including property taxes, insurance, and maintenance.
The REIT leases to a range of companies across industries, and no single corporate tenant makes up more than 3.3% of its annualized based rent (ABR). Some of its biggest tenants include:
- 7-Eleven: 3.3% of ABR
- Dollar General: 3.2% of ABR
- Walgreens: 3.1% of ABR
- Dollar Tree's Family Dollar: 3.1% of ABR
The company's business model is diversified and resilient, able to adapt to inflationary pressures thanks to built-in rent escalators. The REIT is also sensitive to changes in interest rates, and as rates have declined in recent years, this has helped alleviate some of the pressure on the business and lower its borrowing costs. For investors seeking income from real estate, Realty Income is a strong choice.
This home improvement company has raised its payout for 54 years
Lowe's Companies (LOW 3.01%) has a modest dividend yield of 1.7%, but it is a reliable choice for investors. The home improvement retailer has increased its dividend every year for the last 54 years, making it a Dividend King and demonstrating a long-standing commitment to rewarding shareholders.
The company manages its dividend by keeping its payout ratio modest. Lowe's dividend payout ratio is about 39% of net income, providing a buffer so that even if earnings were to fall amid a downturn, it could continue to maintain its dividend streak.
NYSE: LOW
Key Data Points
Looking forward, Lowe's has expanded into a business that has grown beyond a do-it-yourself customer base to a broader professional base, helping drive growth. The company acquired Foundation Building Materials for $8.8 billion at the end of last year, strengthening its presence in building products such as drywall and insulation.
In the past five years, sales from its pro segment have grown from 19% of sales to 30%. This shift helps make its earnings more resilient by diversifying among different customer segments. For investors looking for both income and growth, Lowe's is another solid choice.
This energy giant has raised its payout despite volatility in its industry
Chevron (CVX +2.70%) is a top dividend stock in the energy industry thanks to its diversified business model. For 38 consecutive years, the company has raised its annual dividend payout despite operating in the highly volatile oil and gas industry.
To put its dividend streak into perspective, Chevron has continued to grow its payout through periods that included the Great Recession in 2008, the oil crash that culminated in 2016, and the 2020 oil price crash amid the pandemic-induced demand crunch.
NYSE: CVX
Key Data Points
The company has an integrated business model across different parts of the oil and gas value chain. Another key advantage is its mix of short-cycle and long-cycle assets.
It acquired the offshore Stabroek Block in Guyana in 2025, giving it huge, low-cost, multi-decade production capabilities. The Stabroek Block has a Brent crude break-even cost of between $25 and $35 per barrel, providing strong margins even if oil prices fall further from here. And its presence in the Permian Basin enables it to quickly ramp up (or shut down) production in response to fluctuating oil prices.
Looking forward, it has an opportunity to benefit from the rising demand for natural gas. Last year, it launched a joint venture with GE Vernova to build up to 4 gigawatts of generating capacity from natural gas power plants. This will help Chevron provide reliable electricity that data centers desperately need.
Given its strong presence in the oil and gas sector and a history of prudent capital management, Chevron is an excellent dividend stock in the energy sector.
