There are several characteristics to look for when buying dividend stocks for the long haul. Ideally, you want companies with stable and growing revenue, excellent track records of dividend increases, and histories of shareholder-friendly management, just to name a few important attributes. With that in mind, here are five examples of excellent dividend stocks for the long haul, as explained by our analysts.
Selena Maranjian: You might not think of Apple (NASDAQ:AAPL) as a dividend stock, but it recently yielded a solid 1.7%, and its payout has increased by an annual average of about 11% over the past three years. Better still, it's sitting on plenty of cash -- more than $200 billion -- so that payout isn't in any foreseeable danger. It's true that some 90% of that is held abroad, which isn't ideal, but even having 10% at home represents a lot of money.
Apple is committed to rewarding shareholders, too -- not only with a dividend, but also with share buybacks. It has already bought back about $90 billion of stock, with $50 billion more authorized.
Management disappointed many investors during the company's recent quarterly earnings report by projecting relatively weak earnings, but even those weren't too shabby -- and the company is known for issuing conservative guidance. In the quarter, iPhone sales surged 35% over year-ago levels, with many expecting a further bump from the release of the iPhone 6 "s" model, presumably in the fall. Overall revenue was up 33%, too, with gross margins growing. Meanwhile, as global PC sales shrink, Apple's Mac sales jumped 9%.
Sales of the new Apple Watch seem to have lagged some expectations, but the product is still new, and Apple hasn't released a lot of detail on its performance. Apple has other new offerings as well, such as its music streaming business and Apple Pay. The company is also moving aggressively into promising regions abroad, such as China, where it has already become the top smartphone seller.
Better still, it's not even exorbitantly priced, with a recent P/E ratio of 14. Give this dynamic, growing, dividend-paying innovator some consideration for your portfolio.
Dan Caplinger: PepsiCo (NYSE:PEP) hasn't always gotten as much respect as it deserves, as it has long played second fiddle in the soft-drink business to its red-canned rival. Yet what PepsiCo has that its primary competitor doesn't is a burgeoning snack business, and that has been instrumental in helping the company overcome pressure from growing concerns about the possible health impacts of both sugar-laden and diet carbonated soft drinks.
From a dividend perspective, PepsiCo is a member of the elite group of Dividend Aristocrats, with the drink and snack giant having boosted its dividend every single year for the past 43 years. Just last month PepsiCo made its latest increase, sending its dividend up more than 7% to $0.7025 per share on a quarterly basis. That works out to a dividend yield that approaches 3%, and over the past decade, PepsiCo's payout has roughly tripled, showing off the growth the company has enjoyed.
PepsiCo has worked hard to build up a worldwide presence, and its latest results confirmed its emerging-market success. With innovative product launches that range from craft sodas to snack offerings adapted from existing hit products, PepsiCo should have the staying power to give investors powerful returns for years to come.
Matt Frankel: One dividend stock that could deliver excellent performance for the next decade and beyond is Health Care REIT (NYSE:HCN). As the name implies, this REIT invests in healthcare properties -- mainly senior housing and long-term care facilities.
There are a few reasons why Health Care REIT is a good long-term candidate. First, demand for this type of property is projected to grow at a rapid pace over the coming years. In fact, the 75-and-older age group is expected to grow five times faster than the overall population between now and 2035. Plus, Health Care REIT is a leader in a fragmented industry. The healthcare real estate market is approximately $1 trillion in size and growing, leaving plenty of room for future investment opportunity, both in terms of acquisitions and development.
Finally, HealthCare REIT partners with some of the most experienced operators in the business, and likes to expand alongside them. In other words, by expanding on already-successful partnerships, HealthCare REIT takes much of the guesswork out of its growth strategy -- which can be seen by the company's 87% occupancy rate (83% is average) and the fact that the company's senior housing units generate 52% more income than the industry average.
The numbers speak for themselves here. Health Care REIT pays a generous 4.8% annual dividend that has grown consistently over the past several decades, and it has produced an outstanding 16.1% average total return since its inception. And, while past performance doesn't necessarily guarantee future results, with the increasing demand for healthcare properties, there is no reason to think the strong performance won't continue.
There is no better entertainment company to own. Disney's got some of the most solid intellectual property around -- the Marvel comic book universe, for one, and the Star Wars galaxy for another. As if that wasn't enough, it also owns America's best feature animation studio, Pixar.
Disney operates a big Hollywood studio, but filmed entertainment is just one of its divisions. Media networks (i.e., television and related assets) and parks and resorts (Disneyland and the like) are both thriving. Ditto consumer products, essentially the merchandise arm of the company.
The brilliant thing about Disney is that it's excellent at leveraging its intellectual property among those divisions. A successful movie can generate a spinoff TV series, not to mention a popular line of related merchandise and even a new ride at a theme park.
This gives Disney many levers to pull that can magnify revenue and add to the company's bottom line. That's why it is and will continue to be a highly profitable company paying a solid dividend -- now and well into the future.
Asit Sharma: Choosing a dividend stock you can own for a decade going forward is a thought-provoking exercise. A basic principle to remember is that it's not enough to isolate a stock with the ability to pay out and grow a dividend over the next decade. The company should also operate within an industry that has a reasonable certainty of growth over the long-term.
I find both conditions in Weingarten Realty Investors (NYSE:WRI), a real estate investment trust (REIT) that leases retail space to tenants, primarily in grocery store-anchored shopping centers which it either owns or leases.
Weingarten operates 232 income-producing properties across 20 states. Long-term leases with grocery stores like Kroger, Whole Foods, Wal-Mart, Harris Teeter,and Publix anchor most of the company's shopping centers. Weingarten's revenue is extremely well diversified among its properties: as of the company's last annual report, no single center provided more than 2% of total annual base rental revenue.
I believe WRI will benefit from the multi-year evolution in grocery store formats as leading grocers continue to expand their core store layouts while experimenting with new designs and footprints. From the expansion of Publix into new states to Whole Foods' upcoming "365" store format, there's plenty of growth ahead in this stable property investment concept. Weingarten has a well-structured balance sheet and is quite disciplined about disposing of aging properties it chooses not to renovate. Best of all, WRI offers a current dividend yield of 4%, creating long-term total return opportunities for those who like to reinvest their dividends.
John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Asit Sharma has no position in any stocks mentioned. Dan Caplinger owns shares of Apple, Walt Disney, and Whole Foods Market. Eric Volkman owns shares of Walt Disney. Matthew Frankel owns shares of Whole Foods Market. Selena Maranjian owns shares of Apple, PepsiCo, Walt Disney, and Whole Foods Market. The Motley Fool recommends Apple, Health Care REIT, PepsiCo, Walt Disney, and Whole Foods Market. The Motley Fool owns shares of Apple, Walt Disney, and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.