5 Top Dividend Stocks Investors Should Never Sell

While a lot of folks are busy trying to identify the next big investment trend, keep this tidbit of information in mind: Over the long run, dividend stocks have run circles around their non-dividend-paying peers.

Dividend stocks might lack the pizzazz of high-growth stocks and appear boring on the surface, but they’re a model of consistency. Income stocks are almost always profitable, they typically have time-tested business models, and they’re the real key to compounding investor wealth over the long term. Dividend reinvestment plans, or Drips, are what many of the most successful money managers use to create wealth for their clients.

But let’s face it — no two dividend stocks are alike…

There are hundreds upon hundreds of income stocks for investors to choose from, and quite a few look to be poor places to park your money. That’s where the following five companies come into play. These might as well be the top dividend stocks in the world. Income-seeking investors can safely buy into these five stocks and shouldn’t have to worry about ever having to sell.

Johnson & Johnson

Healthcare conglomerate Johnson & Johnson (NYSE:JNJ) might find itself in the news of late for all the wrong reasons (opioid lawsuits and cancer scares tied to its baby powder), but that doesn’t in any way impact the belief that it’s probably the safest dividend stock on the planet. After all, Johnson & Johnson is one of only two publicly traded companies with a AAA credit rating from Standard & Poor’s, which is a higher rating than the U.S. government. Put another way, S&P has more faith in J&J repaying its debts than it does of the U.S. government making good on its own debts. That should tell you something about the caliber of company you’re dealing with in J&J.

What makes J&J so great is its business setup. Its three operating segments each check off an important box to help complete the puzzle. Consumer healthcare products, for instance, is a slow-growth division, but it generates extremely predictable cash flow. Then there’s medical devices, which has been hurt by commoditization in the near term, but should shine as the global population continues to age. In other words, it’s the long-tail growth opportunity for J&J. Lastly, there’s pharmaceuticals, which provides the bulk of Johnson & Johnson’s margins and growth. Keep in mind, though, that brand-name drugs have a finite period of exclusivity, which is why medical devices and consumer healthcare play such key roles.

In each of the past 35 years, Johnson & Johnson has delivered adjusted operating earnings grow, and it’s riding a 57-year streak of having increased its annual dividend. With J&J, you simply reinvest its current annual yield of 2.8% and let management do the work for you.

NextEra Energy

Anytime you can add an established company to your portfolio that provides a basic-need good or service, there’s a pretty good shot you’ll never need to sell it. That’s exactly the reasoning why shareholders of electric utility NextEra Energy (NYSE:NEE) should consider hanging on to this stock forever.

The beauty of providing electricity to consumers is that their consumption habits don’t change much if the economy is booming or in recession. This allows NextEra to map out its capital expenditures with a very good idea of what sort of cash flow it can expect in a given year. Plus, with its traditional electricity operations regulated (meaning it has to request price increases from state utility commissions and can’t pass them along to consumers at will), NextEra avoids exposure to the potentially volatile wholesale electricity market.

What separates NextEra from being just any old utility is the fact that it’s made significant investments in renewable energy. No utility is generating more electricity from wind or solar than NextEra Energy, which is a big reason why the company is set to grow at a considerably faster pace than its peers. Additional projects, such as “30-by-30,” which seeks to install 30 million solar panels by 2030, should add to NextEra’s already enviable position. Suffice it to say that this 2.2% yield is exceptionally safe.


Remember, folks, boring is beautiful when it comes to collecting a healthy dividend, and there may not be a more boring business model on Earth than AT&T (NYSE:T). As a shareholder, I’ll admit that things have gotten a bit more exciting now that it owns Time Warner, but the days of being surprised come earnings time are long gone (which is actually a good thing).

What anchors AT&T’s business is the company’s wireless operations. Since this is predominantly a subscription-based model, and consumers are far less likely to cancel subscriptions during periods of weak economic growth, this makes AT&T’s wireless services a borderline basic need. Maybe the best part about this segment is the ongoing rollout of 5G networks. This first major upgrade in network infrastructure in almost a decade should lead to a considerable bump in consumer data usage, which is great news considering that data is where AT&T makes its margin in wireless.

As noted, AT&T can also lean on newly acquired Time Warner to bolster its bottom line. Time Warner’s core assets (TNT, CNN, and TBS) should provide added pricing power when negotiating with advertisers, and could be the dangling carrot that helps to lure streaming users away from competitors. At a yield of 5.4%, and sporting a 35-year streak of increasing its annual payout, you probably won’t find a safer high-yield dividend stock than AT&T…

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