Want Decades of Passive Income? 2 Stocks to Buy Now and Hold Forever.
Some investors are in the market to achieve outsize returns. This might push them to earlier-stage and higher-risk companies. On the other end of the spectrum are investors who want the businesses that they own to write them a check every quarter. They might not necessarily care about outperforming the broader stock market over the long term.
If decades of passive income is something that you’re after, then consider these two stocks to buy now and hold forever.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
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First on the list is Coca-Cola(NYSE: KO), which dominates the non-alcoholic ready-to-drink market on a global level with its more than 200 different beverages. The board of directors is expected to increase the quarterly payout this month, which would mark 64 consecutive years of a hike. This is a phenomenal streak that makes the stock a Dividend King.
Today, the dividend yield is 2.59%. Coca-Cola’s dividend payout has risen by 46% over the last 10 years. Investors can get behind that kind of track record.
This is one of the most stable companies out there. Demand is durable, whether we’re in a recession or experiencing robust economic growth. That’s because these are small drink purchases, which consumers have built a habit around.
The company’s brand can’t be overlooked. It supports Coca-Cola’s leading position in the industry. And even more importantly, it helps drive ongoing pricing power. This favorable characteristic is perhaps one of the main reasons why the company has been a top holding in Berkshire Hathaway‘s portfolio.
A key part of Coca-Cola’s strategy is to outsource bottling and distribution to third parties. This results in strong profits. Last year, the company reported a stellar operating margin of 28.7%. Therefore, investors shouldn’t worry about the dividend being in jeopardy of being cut.
The other stock to consider is Lowe’s(NYSE: LOW). With $20.8 billion in Q3 2025 sales, it’s behind only Home Depot in the massive home improvement market. Lowe’s has paid a dividend since 1961. And in May last year, it raised the payout, giving it a streak of more than 25 years of hikes. It’s in the same class as Coca-Cola when it comes to capital returns.
The dividend yield of 1.67% right now is not as high as Coca-Cola’s. In the past decade, however, the quarterly dividend has increased by a jaw-dropping 329%. That’s a gain that runs circles around the beverage stock.
Its larger peer, Home Depot, might get more attention, but Lowe’s is no slouch. The company has done a good job directing its strategy to boost revenue from professionals, like contractors, plumbers, and electricians, in an effort to win over a high-value customer cohort. Lowe’s still possesses a huge physical footprint, brand recognition, and product availability to be successful in the long run.
Over the past decade, Lowe’s posted an average quarterly operating margin of 11%. This time frame includes headwinds like the pandemic and supply chain bottlenecks, as well as fluctuating mortgage rates. And despite a shaky macro environment nowadays that’s pressuring renovations and upgrades, the dividend has continued its upward trajectory.
Both Coca-Cola and Lowe’s are competitively advantaged businesses that have stood the test of time. And they can provide a solid foundation for someone’s portfolio.
Buying these consumer stocks, however, doesn’t mean that investors will own businesses that will outperform the broader market. That’s never a guarantee with any company, to be sure.
In this situation, though, these are mature companies. So, it will be even harder to register solid growth from an already high base. But their steadiness and consistency support ongoing profits and dividend payouts that income investors will appreciate.
Before you buy stock in Coca-Cola, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Coca-Cola wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $415,256!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,133,904!*
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Home Depot. The Motley Fool recommends Lowe’s Companies. The Motley Fool has a disclosure policy.
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