Analysis

Want Decades of Passive Income? 2 Top Dividend Stocks to Buy Now and Hold Forever.

These stalwart companies could help you safely grow your wealth.

There’s something quite pleasant about having cash deposited into your investment account quarter after quarter and year after year. Here are two outstanding dividend stocks with long histories of rewarding their shareholders with steadily rising cash payments. Both stocks can help you build your own streams of passive income.

Top dividend stock No. 1: Lockheed Martin

Lockheed Martin (LMT -0.01%) helps the U.S. government and its allies protect their citizens from a growing number of threats. The company is a vital ally in an increasingly volatile world.

As a leading defense contractor, Lockheed supplies crucial technology to the U.S. military. Here are just a few examples:

  • The F-35 stealth aircraft serves a crucial role in the security strategies of the Air Force, Navy, and Marines, as well as that of 18 allied nations.
  • The Aegis radar system is helping U.S. forces protect merchant shipping vessels from drone and missile attacks in the Red Sea.
  • Patriot-launched PAC-3 interceptors are enabling Ukraine to fend off Russia’s aerial bombardments.

An F-35 aircraft takes to the skies. Image source: Lockheed Martin.

Lockheed has amassed $159 billion worth of orders for its broad array of defensive platforms. Combined with the long service lives of its key products — the F-35, for one, is expected to remain in service until at least 2080 — this massive backlog gives investors a high degree of visibility into the company’s future cash flow.

Management is committed to passing much of this cash on to shareholders via stock buybacks and a steadily rising dividend. Over the past decade, Lockheed has bought back a quarter of its shares, which has boosted per-share profits for its remaining stockholders. The defense leader has also raised its cash payout for 21 straight years. Today, Lockheed’s dividend yield is a solid 2.7%.

Top dividend stock No. 2: Eli Lilly

For more than 140 years, Eli Lilly (LLY -0.40%) has used cutting-edge science to help people live better. The healthcare leader’s history is chock-full of medical breakthroughs, but its latest discovery could be the most impactful and profitable one yet.

Almost 70% of American adults are obese or overweight, which can lead to life-threatening illnesses like diabetes, heart disease, and strokes. Fortunately, Eli Lilly has developed a game-changing drug that makes it easier for people to lose weight.

Zepbound, the pharmaceutical pioneer’s weight-management treatment for adults, activates hormone receptors that reduce appetite. Participants in a 72-week clinical trial who received the highest dose of the drug lost 48 pounds on average.

When combined with diet and exercise, Zepbound also helped these people improve their cholesterol and blood pressure profiles. And tirzepatide, the active ingredient in Zepbound, can make it easier for adults with type 2 diabetes to control their blood sugar levels. Better still, recent studies suggest that tirzepatide could have positive effects for people with liver disease and sleep apnea.

Due to tirzepatide’s many potential health benefits, CEO Dave Ricks believes it will be the most important medicine of his 28-year career. Wall Street seems to agree. Investment bank Goldman Sachs expects Eli Lilly to be a leader in an anti-obesity drug market that will soar to $130 billion by the end of the decade. The company’s profits, in turn, are projected to increase by more than 60% annually over the next five years.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.

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