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3 Dividend Stocks to Buy and Hold Forever

What's the last thing that investors seeking income want? Temporary solutions. Income investors certainly don't want to buy stocks with dividends that are likely to be slashed. Nor do they desire to buy dividend stocks that could easily lose much of their value.

Instead, income investors prefer dividend stocks with solid business models that are built for the long term. Here are three such dividend stocks to buy and hold forever.

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1. Johnson & Johnson

You're not going to find many dividend stocks with more impressive credentials than Johnson & Johnson (NYSE: JNJ). It's been in business since 1886 and now stands as the largest healthcare company in the world. J&J is a Dividend King with 59 consecutive years of dividend increases. Fortune recognized Johnson & Johnson as the most admired pharmaceutical company in the world.

But the healthcare giant is about to undergo a major change. Johnson & Johnson plans to spin off its consumer health unit into a standalone entity. This will leave J&J with its pharmaceutical and medical device businesses. Should investors be concerned? Not at all.

Importantly, both Johnson & Johnson and the yet-to-be-named consumer health company will pay dividends. The combination of these two dividends should at least be at the same level as J&J's dividend is before the separation.

Johnson & Johnson could also deliver stronger growth for investors after the transaction wraps up, which is expected to happen in 2023. Its pharmaceutical business already serves as the company's primary growth engine.

J&J's track record, attractive dividend yield of 2.6%, and prospects for faster growth give investors a lot to like. This dividend stock is practically a no-brainer pick to buy and hold for the long term.

2. Easterly Government Properties

Easterly Government Properties (NYSE: DEA) is a real estate investment trust (REIT) that has only been in business since 2014. But what really matters is that Easterly's main customer has been around for nearly 250 years. And that customer provides an unparalleled level of stability that makes Easterly a must-have dividend stock for income investors.

You might have guessed who the customer is -- the U.S. government. Easterly focuses primarily on leasing properties to U.S. federal agencies. It currently owns 89 properties.

As a REIT, Easterly must distribute at least 90% of its taxable income to shareholders in the form of dividends. Its dividend yield of 4.9% is especially attractive considering how reliable the company's revenue stream is.

Easterly also has solid long-term growth prospects. The U.S. government is the top office tenant in the U.S. It's likely to shift more to leasing versus owning properties in the future. And the market is fragmented, giving Easterly room to expand through consolidation.

3. Brookfield Renewable

Climate change ranks as one of the biggest global challenges right now. It also stands out as one of the biggest opportunities for some companies, including Brookfield Renewable (NYSE: BEP) (NYSE: BEPC).

Brookfield Renewable is a leading provider of renewable energy. It operates hydroelectric, wind, solar, and energy transition assets across the world that combined generate 21 gigawatts of power.

Carbon reduction efforts will almost certainly drive significantly higher demand for renewable energy in the coming decades. Brookfield Renewable is in an excellent position to capitalize on this increased demand with a development pipeline capacity of 36 gigawatts.

Investors have two options with Brookfield Renewable. Shares of the limited partnership (LP) Brookfield Renewable Partners trade under the BEP ticker. Shares of Brookfield Renewable Corporation, which trade under the BEPC ticker, could be more appealing to investors wanting to avoid the tax hassles associated with LPs. Both offer dividend yields of close to 3.7%. And both stocks are on sale after tumbling in 2021.

Brookfield Renewable expects to grow its dividend distributions between 5% and 9% annually over the long term. The company also anticipates delivering total returns of between 12% and 15%. Either of the Brookfield Renewable stocks are great picks to buy and hold forever.

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Keith Speights owns Brookfield Renewable Corporation Inc. and Brookfield Renewable Partners. The Motley Fool owns and recommends Brookfield Renewable Corporation. The Motley Fool recommends Easterly Government Properties and Johnson & Johnson. The Motley Fool has a disclosure policy.


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