2 Passive Income Stocks I Plan to Hold for the Next Decade

Yahoo Finance ·

My top financial goal is to become financially independent. I'll reach financial freedom once my passive income can cover my basic living expenses. That's leading me to buy stocks that pay sustainable dividends that should continue growing. Two of my top passive income investments are Brookfield Renewable ( BEPC 0.50% ) ( BEP 0.13% ) and Realty Income ( O 0.06% ) . I plan to hold both for the next decade. Here's why. Brookfield Renewable checks all the boxes for what I seek in a core passive income stock investment : A high current yield : At over 4.5%, it's well above the S&P 500 's roughly 1% yield. A strong dividend growth track record : Brookfield Renewable has increased its payout by at least 5% annually since 2011. A fortress financial profile : Brookfield has stable cash flows (90% contracted for an average of 12 years), a comfortable dividend payout ratio (around 75% of its funds from operations (FFO) over the last 12 months), and a strong investment-grade balance sheet (BBB+). Visible growth profile : It expects to grow its FFO per share by more than 10% annually through at least 2031, which should support dividend growth of 5% to 9% annually. While Brookfield's current yield is very attractive, the company's growth potential is why I plan to hold it for the next decade. It has multiple growth drivers, including inflation-linked contractual rate increases, margin expansion as existing contracts expire and renew at higher rates, development projects, and acquisitions.

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An investor has announced plans to hold dividend growth stocks Brookfield Renewable and Realty Income for the next decade, aiming for long-term financial independence. Brookfield Renewable, in particular, secures stable cash flows with a high dividend yield of over 4.5% and an annual dividend growth rate of more than 5%. This dividend growth strategy serves as a key driver for long-term investors to generate reliable passive income and build a robust portfolio amid market volatility.

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