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3 Unstoppable Dividend Stocks That Can Be Pillars To Build Your Portfolio Around
If you're a new investor, want some recurring dividend income, or just want some top stocks to build your portfolio around, it's important to focus on businesses with strong fundamentals and room to generate steady growth for years to come.
Three stocks that can make for solid investments in your portfolio and generate a ton of dividend income over the years are UnitedHealth Group (NYSE: UNH), Home Depot (NYSE: HD), and Bank of Montreal (NYSE: BMO). Here's why these can be excellent buy-and-forget investments right now.
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UnitedHealth Group
Healthcare is a massive expenditure for the U.S. In 2023, it grew by 7.5% to a whopping $4.9 trillion -- that's the equivalent of $14,570 per person, according to the National Health Expenditure Accounts. And the need for health insurance coverage is only going to increase in the future, as the population expands and there are more seniors.
That's why investing in a top health insurance company such as UnitedHealth Group can make for a stable, long-term option for investors.
While the business has been facing some headwinds due to rising medical expenses in recent periods, its earnings from operations totaled $32.3 billion last year and were nearly unchanged from $32.4 billion in the previous year. And UnitedHealth grew its top line by 8% in 2024 with revenue coming in at more than $400 billion.
The stock pays a dividend that yields 1.6% -- that's higher than the S&P 500 average of 1.3%. And what also makes this an attractive investment to hang on to is the dividend growth. In just five years, UnitedHealth has bolstered its quarterly dividend payments by a whopping 94%.
For buy-and-hold investors, UnitedHealth can be a no-brainer dividend investment.
Home Depot
Another inevitability besides healthcare is the need for construction and home repair. Whether it's due to natural disasters or just regular wear and tear, there's always going to be a need for renovations and for people to take on home repair projects.
This is why holding Home Depot stock in your portfolio can make a lot of sense over the long haul. For years, the company has established itself as a top home repair retailer. It's currently facing some headwinds as economic conditions aren't ideal and people aren't rushing out to buy new homes. But the business is still chugging along nonetheless. Over the nine-month period ended Oct. 27, 2024, Home Depot's sales rose by nearly 2% to $119.8 billion. While earnings were down by 4%, the company still posted a solid profit margin of around 10% during that stretch.
Home Depot's stock yields 2.2% today and this has also been an excellent dividend growth stock to own. In five years, the company has increased its dividend by 65%.
This stock makes for a fairly stable investment to hang on to and it can be a great way to bet on the economy's long-term growth.
Bank of Montreal
If you want to invest in the economy, one of the best ways to do so is to buy shares of a bank. A top bank stock to buy today is Bank of Montreal. You won't find many stocks that are more stable than this one, which has been paying dividends since 1829. It offers a high-yielding payout of 4.6% today and it has also been increasing its dividend. In five years, the company has raised its quarterly payout by 50%.
Bank of Montreal has a strong presence in both Canada and the U.S., positioning the business for plenty of growth opportunities in the long run, while also enjoying a fair bit of diversification. As the populations of both countries expand and their economies grow, the bank will inevitably generate a lot more revenue over the years.
In its most recent fiscal year, which ended on Oct. 31, 2024, BMO's revenue totaled 32.8 billion Canadian dollars, which was an increase of 12% year over year. Its adjusted net income did decline during the year, but that was largely due to an increase in its provision for credit losses as it braces for some challenging economic conditions ahead.
The bank stock makes for a fairly stable investment to own because over the long run, the economy is likely to continue growing, regardless of what may happen in the short term. And when combined with its impressive dividend, this can be a pillar for any investor to build their portfolio around.
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*Stock Advisor returns as of January 21, 2025
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
