The stock market is finally giving us hope of better days ahead, with the U.S. debt ceiling debacle behind us. However, investors who are in it for the long-term understand that the market can be volatile, and it is important to pick companies that are stable and reliable. If you are investing for the long-term, do not focus on an individual stock, but rather on the underlying business. A solid balance sheet and reliable business can generate big returns for investors over time.
That said, a dividend-paying company is even better. You get to enjoy passive income while watching your investment grow. When it comes to dividend stocks to buy for the long-term, look at prospective companies’ dividend growth to see if it is worth the investment. If you are looking for long-term dividend stocks to buy this month, here are a few to watch out for.
| JNJ | Johnson & Johnson | $158.52 |
| MCD | McDonald’s | $281.90 |
| BEPC | Brookfield Renewable | $35.10 |
Johnson & Johnson (JNJ)
One of the top high-yield long-term dividend stocks I think is worth buying is a large healthcare company, Johnson & Johnson (NYSE:JNJ). It has established itself a a leader in its industry with its high revenue, stable growth, and consistent dividends. If there’s one stock you want to hold for a long time, it is JNJ.
What makes JNJ a long-term stock to buy and hold is its superior dividend, which the company has consistently raised for 61 consecutive years. It also boosted the dividend by 5.3% this year to $1.19 per share, paid quarterly.
Another benefit of investing in JNJ stock is its business diversification and stability. The company sells products that will continue to remain in demand, no matter the market conditions. A relatively low-volatility name to buy, Johnson & Johnson recently spun off its consumer healthcare segment into a new company, Kenvue (NYSE:KVUE). This move will help improve the profitability of the company’s MedTech and pharmaceutical segment.
In the recent quarter, the company reported a revenue of $24.7 billion, noting a 5.6% year-over-year rise, and a loss of $68 million. Notably, its pharmaceutical segment contributed $13.4 billion and MedTech brought in $7.5 billion, while the consumer healthcare segment brought in only $3.9 billion in revenue.
Importantly, the company also recently announced a legal settlement with Amgen (NASDAQ:AMGN) to delay a biosimilar version of its drug Stelara until January 2024. This means JNJ could see a jump in revenue. The psoriasis treatment drug has been a top seller for the company, with sales hitting $9.7 billion in 2022.
The patent is set to expire this year, meaning there’s a high likelihood of generics hitting the market soon. However, the legal agreement ensured that rival drugmakers may be delayed in entering the market, allowing JNJ to keep prices higher for longer. I think these developments bode well for JNJ stock over the long-term.
McDonald’s (MCD)
Some investors love McDonald’s (NYSE:MCD) burgers as much as they love the stock. MCD stock is hitting new all-time highs, and has outpaced the market over the past year. Trading around $282 today, MCD stock is nearing one of its highest valuations ever. That said, even at these elevated levels, I think MCD stock is a long-term winner.
One big reason to invest in the stock is its massive expansion plans. The company is rapidly-expanding its footprint in the fast-food industry, providing stable revenue growth over time. Consumers are continuing to buy Big Macs, and a surge in revenue over time should support the company’s dividend, which currently yields around 2.1%.
This supersized growth can generate significant gains for investors over the long-term. McDonald’s saw a 13% rise in comparable store sales growth in the recent quarter. This was driven by a super successful franchising strategy that has worked wonders for the business. It is also seeing a rise in demand through its delivery and drive-thru channels.
One thing is certain – through inflation or recession, McDonald’s offers products and services that can thrive. Since it offers affordable luxuries, consumers might cut down on other spending, but will still choose to enjoy a burger. Fine dining sales may decline, but McDonald’s lower-priced burgers are likely to remain in vogue. This provides investors with relative defensiveness and stability, even during periods of high volatility in the market.
The company maintains a strong position in its core markets and high profitability, which supports the company’s dividend over time. I think McDonald’s is likely to continue to raise its distribution over time, making this a dividend stock to buy and hold forever.
Brookfield Renewable (BEPC)
With the world moving towards green energy, Brookfield Renewable (NYSE:BEPC) is in a great position to grow. The company focuses on renewable energy projects involving wind, hydroelectric, solar, and energy storage facilities. Brookfield has a strong asset base as well as several long-term power purchase agreements with companies, providing steady cash flow. Additionally, Brookfield has an extensive pipeline of projects that will drive growth in the long-term.
The company closed $12 billion worth of contracts for the next five years, highlighting the strength of its business model. This was complemented nicely by the acquisition of Origin Energy. I think these investments will allow the company to expand its capacity sustainably.
Brookfield Renewable has a top-notch balance sheet and a solid pipeline of contracts that will continue to generate income. The company pays a dividend yield of 3.8%, or a quarterly dividend of 34 cents. The company’s management team expects to increase its payout by 5% to 9% annually. Indeed, BEPC stock is one of the most reliable long-term dividend stocks within the green energy sector.
BEPC stock is trading around $35 today, up 25% year to date. Looking at the company’s long-term potential, the stock looks undervalued to me. In the recent quarter, the company generated maximum revenue through power purchase and revenue agreements. It reported a 13% increase in its funds from operation, as compared to the previous year. These results show that the company has a solid hydroelectric generation portfolio and enough liquidity to keep rewarding shareholders. If you believe in a greener future, BEPC stock is one to buy and hold.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
