Buy, Hold, Profit: 3 Dividend Stocks to Own Forever at Bargain Prices

Stocks to buy

Today’s dividend stocks are increasingly popular in a wild reversal as top tech stocks take center stage and push market indices back to all-time highs. But that presents a prime opportunity for income investors and long-term “buy and hold” strategists. Many top earners and long-term compounders are priced to buy at a bargain today.

If you’re cautious, you may also be nervous about the increasing market concentration in just a handful of stocks. That’s a reasonable fear, and just like dividend stocks benefit income investors, they’re also an ideal asset to cycle into if you (like many) think we’re on the cusp of an imminent correction.

Realty Income (O)

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Realty Income (NYSE:O) often tops lists of dividend stocks to own forever, and it’s clear why. The company’s dividend aristocrat status, monthly distributions and 5.66% yield make it a perennial favorite. And, after falling nearly 20% over the past year, this dividend stock is priced to buy if you’re in it for the long haul. Nothing has materially changed about O’s inherent stock strength, making the company a compounder for buyers today.

Realty Income boasts more than 98% occupancy across its properties, with 80% of retail tenants belonging to sectors resilient to economic downturns. Most notably, a significant portion of these tenants are in the grocery sector, with convenience stores, dollar stores and drugstores also making up a substantial part of its portfolio, creating a robust mix immune to all but the most devastating downside.

The company’s triple-net lease model also transfers all operational risks and expenses, including property maintenance costs, to the tenants. This structure effectively protects Realty Income from the rising material and labor costs often accompanying higher interest rates. Moreover, with leases typically lasting 15 years or more, complete with renewal options, Realty Income enjoys a steady stream of rental income. The average lease term until renewal is just below 10 years today, giving the REIT considerable flexibility over the next decade, no matter what the economy does (or doesn’t) do in the interim.

AT&T (T)

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AT&T (NYSE:T) positions itself as a leading growth-oriented dividend stock, pushing the boundaries of a globally connected future while offering a healthy 6.48% total yield. The company is pivotal in funding AST SpaceMobile’s (NASDAQ:ASTS) satellite-based cell service project, slated for commercial release in 2024, marking a significant boost for AT&T’s growth prospects in 2024 and proving that dividend stocks aren’t just “boring but reliable.”

In its recent earnings report, AT&T highlighted its growth trajectory despite earnings falling short of expectations. But, considering the upside, disappointing earnings create a perfect buying opportunity. The report revealed a nearly 4% year-over-year increase in wireless service revenue, showcasing AT&T’s ability to maintain a high subscriber base and implement necessary price adjustments amidst challenging economic conditions. This achievement is underscored by AT&T’s postpaid phone net additions, which exceeded expectations at 526,000 against the forecasted 487,500. Considering how competitive and saturated the telecom market is, this performance is awe-inspiring and bodes well for AT&T’s further growth if its ASTS investment bears fruit.

Medtronic (MDT)

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Speaking of mixing dividends with growth, few healthcare companies are better investments than this dividend aristocrat, yielding 3.37% today.

Medtronic (NYSE:MDT) offers the perfect blend of stability and growth potential unmatched by any other. Healthcare is a perennial top pick for long-term investing, and Medtronic’s sector dominance and dividend status set it apart.

Medtronic’s collaboration with Nvidia (NASDAQ:NVDA) to craft an AI-driven diagnostic tool reinforces its unique position at the intersection of growth and stability. Likewise, Medtronic’s CEO Geoff Martha recently emphasized the company’s strategic use of AI to enhance clinical decisions, innovate new treatment indicators and personalize patient care, positioning Medtronic at the forefront of AI integration in medical technology.

Today, Medtronic is gearing up for a late February earnings announcement. Given the impressive results of its previous report, investors should anticipate another strong showing for the dividend stock.

On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.

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