2 Supercharged Dividend Stocks to Buy and Hold for Years

Dividend stocks can be a great addition to your portfolio for investors of all preferences and risk tolerance levels. You can find a dividend-paying stocks across multiple different sectors. While high yield might be the first thing to get your attention, it's important to look beyond that metric.

Dividend yields are connected to the stock's price. So, it's not uncommon to see a high yield from a stock that has been discounted by the market, while a stock that has performed well may have a lower-than-average yield while still generating a great overall return.

As with any stock, you want to make sure you're investing in a quality company with a strong underlying business. With dividend payers, you should also look for companies that have an established history of both raising and maintaining their payouts in a wide range of market environments.

On that note, here are two top dividend stocks that fit the bill to consider adding to your buy basket shortly.

1. Johnson & Johnson

Johnson & Johnson (JNJ 0.96%) continues to deliver steady growth and shareholder returns with a business that has been a mainstay in the pharmaceutical industry for nearly 140 years and counting. The healthcare giant pays a dividend that yields around 3.3% at the time of this writing.

That dividend has increased about 80% over the trailing decade alone. It's also worth noting that the company is in a hallowed group of stocks -- known as Dividend Kings -- with a decades-long history of paying and increasing their dividends every single year. Johnson & Johnson has 62 years in a row of dividend increases to its name at this point.

J&J's business currently revolves around two segments. These include its innovative medicine segment, which focuses on a wide range of disease areas including immunology, oncology, and neuroscience concerns, and MedTech, which features devices across orthopedic, vision, and various surgical specialties.

Last year, Johnson & Johnson finalized the spinoff of its consumer health segment into a new publicly traded, dividend-paying entity called Kenvue. While this rid the company of a much slower-growth business, Johnson & Johnson still maintains significant ownership control through common stock and received a notable cash windfall from the spinoff.

The first quarter of 2024 was excellent on multiple fronts for this tried-and-true business. Total sales for the three-month period eclipsed $21 billion, up 2.3% from one year ago, a solid growth rate for a business of this size. Where the company reported a net loss in the year-ago quarter because of one-time charges related both to the spinoff and ongoing talc litigation, net income totaled $5.4 billion in the recent quarter.

Broken down by segment, innovative medicine brought in $13.6 billion in net sales, up over 8% from one year ago if you excluded its COVID-19 vaccine. The MedTech business accounted for $7.8 billion of net sales, up 6.3% on an operational basis from the same quarter in 2023, helped by a resurgence in general surgical procedures and the continued impact of its Abiomed acquisition.

This behemoth business has raked in operating cash flow of $23 billion over the trailing 12 months. For dividend investors, this business can produce long-term growth and returns amid market highs and lows, a tempting buying proposition in any market environment.

2. Procter & Gamble

Procter & Gamble (PG 1.21%) currently yields 2.5% for investors. Not only has Procter & Gamble increased its dividend to the tune of about 60% in the trailing decade alone, but it has boosted its investor payout every single year for 68 years -- also making it a Dividend King. As icing on the cake, this is actually the 134th consecutive year that the company has paid a dividend since it was first incorporated.

The consumer goods giant has dealt with pressure from shifting spending by consumers, a tough macro environment, and rising costs in the last few years. However, this business revolves around essential goods and products that consumers need no matter what is going on with the state of the world.

Among some of Procter & Gamble's many brands are household mainstays including Pampers, Downy, Tide, Charmin, Always, Febreze, and Swiffer. This gives the company considerable pricing power even in a difficult operating backdrop.

Margins have certainly felt the pressure of consumer spending shifts. However, the company remains profitable and continues returning its success to shareholders in the form of faithful dividend payments.

Procter & Gamble generated total net sales of $20 billion in the most recent quarter. That represented an increase of around 1% from one year ago, not uncommon for a business at this stage of maturity and a fairly standard growth rate for this company. However, net earnings grew 10% from one year ago to $3.8 billion while operating income jumped 5% year over year to $4.5 billion.

The company also generated operating cash flow of $4.1 billion in the quarter while finishing the three-month period with a cash stash in the amount of $6.8 billion. Investors might find that this dependable business makes a wise addition to a long-term buy-and-hold portfolio.