7 Dividend Stocks to Buy and Never Sell: January 2024 Edition

Dividend Stocks Overview - Stocks have outperformed other asset classes over the past century, with equities beating gold by 5.6% annually, housing prices by 6.6%, Treasuries by 6.8%, and oil by 8.4% annually [1] - Dividend stocks have historically outperformed non-dividend payers with less risk, making them a strong choice for long-term investment [1] - Between 1973 and 2022, dividend-growing stocks returned over 10%, while stocks that cut dividends lost money [1] LVMH Moet Hennessy Louis Vuitton (LVMUY) - LVMH owns 75 luxury brands across various categories, including Louis Vuitton, Dior, Fendi, and Sephora [2] - The company enjoys gross margins of almost 70% and operating margins above 25% [2] - LVMH's customer base represents the top 5% of luxury spenders, accounting for 40% of global luxury sales [3] - The company pays dividends twice a year, with a 16% annual growth rate over the past five years and 13% over the last decade [3] - Free cash flow (FCF) has grown exponentially, supporting its dividend payouts [3] Johnson & Johnson (JNJ) - Johnson & Johnson focuses on high-margin pharmaceutical drugs, which make up 65% of its total revenue [5] - The company has a portfolio of billion-dollar therapies, including Stelara, Tremyfa, Darzalex, and Simponi [5] - Revenue is forecast to grow 7-8% annually, with adjusted profits growth of 12-13% [5] - Johnson & Johnson spun off its consumer products business into Kenvue, allowing it to focus more on healthcare [5] - The company has paid dividends every year since 1944 and has raised its payout for 61 consecutive years [6] - It currently yields a 2.8% annual dividend with a payout ratio of 35%, indicating room for future growth [6] Lowe's (LOW) - Lowe's has delivered a 511% total return since 2014, outperforming the S&P 500's 210% return [7] - The company has increased its dividend at a compounded annual rate of 20% over the last decade and has raised it for 60 consecutive years [7] - Lowe's has a low payout ratio of 34%, supported by strong free cash flow of $11 per share compared to an annual dividend of $4.38 per share [7][8] - The company is the largest retailer of appliances with a 28% market share, ahead of Home Depot (23%) and Best Buy (14%) [8] - Lowe's business is resilient during housing market declines, as homeowners continue to invest in home improvement projects [8]