Want Decades of Passive Income? 3 Stocks to Buy Now and Hold Forever

What’s better than receiving passive income? Enjoying it for decades.

Generating long-term passive income is easier than you might think. Here are three stocks to buy now and hold forever for a lifetime of dividends.

1. AbbVie

Let’s start with some bona fide dividend royalty. AbbVie (ABBV -0.08%) is a Dividend King, with 52 consecutive years of dividend increases. We’re not talking about skimpy dividend hikes. Since its spinoff from Abbott Labs in 2013, AbbVie has increased its dividend payout by 310%.

The big drugmaker’s forward dividend yield currently stands at nearly 3.6%. That’s on the low end of AbbVie’s dividend yield range in recent years. But there’s a good reason for this: AbbVie stock has performed well.

I expect AbbVie to continue delivering share price appreciation and growing dividends over the next decade and beyond. Although sales are sliding for the company’s top-selling drug, Humira, due to a loss of patent exclusivity, AbbVie has a strong product lineup and pipeline that’s stepping up to the plate.

In particular, autoimmune disease drugs Rinvoq and Skyrizi should drive AbbVie’s revenue growth over the next few years. However, the company has plenty of other rising stars, including migraine therapies Ubrelvy and Qulipta, leukemia drug Venclexta, and antipsychotic drug Vraylar. AbbVie’s pipeline also holds tremendous potential, with over 90 programs in clinical development — more than 50 of which are in mid-to-late-stage clinical testing.

2. Realty Income

Realty Income (O -0.74%) isn’t a Dividend King like AbbVie. However, the company, which ranks as the world’s seventh-largest real estate investment trust (REIT), has an impressive track record, with its dividend increasing for 30 years in a row.

Investors seeking passive income should like Realty Income’s forward dividend yield of 5.4%. They should also be pleased that the REIT pays its dividend monthly instead of quarterly. Realty Income even calls itself “The Monthly Dividend Company.”

The commercial real estate market can sometimes be volatile. The good news with Realty Income is that its portfolio is highly diversified, with over 1,550 clients representing 90 industries. Around 90% of the company’s total rent roll is largely insulated from economic downturns and threats from e-commerce.

While Realty Income’s dividend is its main draw for investors, I think this REIT will be able to deliver solid growth, too. The company has additional opportunities in the U.S. in several areas, including consumer-centric medical facilities, data centers, freestanding retail, and industrial facilities. It has even greater growth prospects in Europe, especially in the U.K., with an estimated total addressable market of $8.5 trillion.

3. Verizon Communications

Verizon Communications (VZ -0.09%) has been popular with income investors for years — and for good reason. The telecommunications giant offers a juicy forward dividend yield of 6.07%.

This high yield isn’t the only plus for Verizon’s dividend program. The company has increased its dividend for 18 consecutive years.

Sure, Verizon operates in an intensely competitive industry. The company (along with its peers) continually face significant customer churn. These factors have contributed to Verizon’s modest revenue growth in recent years.

But the telecom leader is still able to generate strong free cash flow ($14.5 billion in the first three quarters of 2024). This resilience should give investors seeking passive income a warm-and-fuzzy feeling about Verizon’s dividend.

I think Verizon’s growth could accelerate by the end of this decade or early in the next decade, though. Some industry experts predict that 6G will debut by 2030. The greater capacity, speed, and reliability of 6G wireless networks could pave the way for a surge in augmented reality and Internet of Things adoption. If so, the demand for Verizon’s wireless services should increase significantly.