As a dedicated long-term investor focused on dividends, it’s easy to become attached to certain stocks. However, this emotional connection can sometimes cloud judgment, particularly if attractive opportunities arise due to business challenges. Over the years, I’ve learned valuable lessons from my investment journey, especially when it comes to high-quality companies that have shown resilience and growth. Here, I’ll highlight three exceptional dividend stocks that I’m committed to holding through thick and thin: Realty Income (NYSE: O), Procter & Gamble (NYSE: PG), and Hormel Foods (NYSE: HRL).
Realty Income: A Lesson in Patience and Growth
Realty Income, known as “The Monthly Dividend Company,” has been a cornerstone of my portfolio for quite some time. My initial investment came when the yield exceeded an impressive 10%, with REITs still emerging in popularity among investors. Although I later sold it when the yield dipped to approximately 4%, it was a decision I now regret. I underestimated the power of consistent dividend growth and the resilience of Realty Income’s business model.
What sets Realty Income apart is its robust investment-grade balance sheet and an enviable track record of increasing dividends for 29 consecutive years. This reliability comes from a strong portfolio stretched across over 15,400 properties in the U.S. and Europe, where tenants cover the majority of operating expenses. While rapid growth may not be in the cards, I find comfort in its steady 5% yield, making it a great choice for long-term, income-focused investors.
Procter & Gamble: Innovation at Its Core
In the realm of consumer staples, Procter & Gamble reigns supreme. This behemoth owns iconic brands such as Tide, Pampers, and Gillette. With a prestigious history of 68 consecutive annual dividend increases, P&G exemplifies what a Dividend King is all about. Beyond its financial strength, what truly distinguishes P&G is its commitment to innovation.
The company’s sophisticated research and marketing strategies have allowed it to create new categories, such as the Swiffer cleaning line—demonstrating its ability to adapt and stay ahead in a competitive market. Currently, P&G offers a yield of around 2.4%, and since I acquired it closer to 4%, I’m enjoying substantial capital appreciation. Even amidst challenges, my strategy is to allow this industry leader to grow steadily and reward me with increasing dividends.
Hormel Foods: A Solid Foundation Despite Turbulence
Hormel Foods is yet another stalwart in the dividend-paying arena, boasting a revered history of 58 continuous years of dividend increases. Recently, it has come under pressure due to rising costs, avian flu impacts, and a challenging recovery landscape in China, coupled with challenges following its acquisition of Planters. While the market sentiment around Hormel is currently lukewarm, its dividend yield stands at a compelling 3.6%.
One unique aspect of Hormel is the notable stake held by the Hormel Foundation, which owns nearly 47% of the company. This not-for-profit actively relies on Hormel’s dividends to fund its initiatives, creating a vested interest in the company’s sustained growth and dividend policies. Despite the recent hurdles, I remain confident that Hormel will navigate its way back to stability, making it a worthwhile hold during this transitional phase.
The Importance of Holding Quality Investments
While every investment carries inherent risks, my commitment to Realty Income, Procter & Gamble, and Hormel Foods stems from their strong fundamentals and historical performance. Should any of these companies significantly alter their business models or strategies, I may need to reconsider these positions. But for now, I intend to hold on tight and hopefully pass these quality investments to future generations, having learned the hard way just how valuable enduring companies can be.
In an era where the market ebbs and flows, keeping a keen eye on quality dividend stocks is more relevant than ever. These choices don’t just offer potential monetary returns; they embody the essence of smart investing—focusing on companies that prioritize growth and shareholder value over time. If you’re on the lookout for reliable investment options, consider adding these dividend champions to your portfolio. They may just be the ticket to a fruitful financial future, balancing risk with the promise of steady income and capital appreciation over the long haul.