3 Dividend Stocks to Buy and Hold for Long-Term Income in 2024 (2024)

2024 is set to be one of the most unpredictable years in recent memory. A historic election year, geopolitical conflicts and their spillover effects and an uncertain economic backdrop are all in the cards. In this dynamic world, dividend stocks for long-term income are a solid bet.

This year, more than 2 billion people will vote in elections in the U.S., U.K., European Union, India, Pakistan, Indonesia, Mexico and South Africa, among others. Of course, the most consequential for investors will be the U.S. elections, which could heighten market volatility. Additionally, the uncertain outcome of the current geopolitical turmoil and monetary policy direction raises the stakes even further.

As we navigate the complexities of the current economic environment, dividend stocks should be a cornerstone of your portfolio. They not only withstand market volatilities but also provide a steady income stream. Remember, the allure of dividend stocks lies not just in the immediate cash flow but also in their potential for long-term capital appreciation.

In this context, we explore three compelling dividend stocks for long-term income. Each is distinguished by a robust business, consistent dividend history and promising prospects. These stocks are not just mere placeholders in a portfolio. They can provide sustainable and growing dividends. Therefore, they are ideal for buy-and-hold investors focused on long-term income.

Enbridge (ENB)

Enbridge (NYSE:ENB) is one of the most important infrastructure companies in North America. It runs one of the largest pipeline networks in the region, and its infrastructure is essential for transporting crude oil and natural gas. While it’s exposed to the underlying commodities, the nature of business — long-dated take-or-pay contracts — protects revenues.

One of the most important assets the company owns is the Mainline system. This pipeline network carries natural gas liquids and various crude oil varieties from the Canadian oil sands to refinery hubs in eastern Canada, the U.S. Midwest, and the U.S. Gulf Coast. Most Canadian oil producers use the pipeline to access multiple markets across the U.S.

Typically, the Mainline system has a utilization rate above 90%. Two-thirds of Canadian crude production flows through this network to the Canadian East Coast, the U.S. Gulf Coast and Cushing, OK. Other key assets include five intra-Alberta long-haul pipelines and several Gulf Coast and Mid-Continent pipelines like the Seaway Pipeline between Cushing, OK and Freeport, TX.

These diverse pipeline assets are a source of reliable income for Enbridge. Primarily, its operations are based on long-term contracts, usually more than 10 years. For instance, the average length of a gas transportation contract was 15 years as of December 2022. These long-term contracts enable Enbridge to generate stable and predictable cash flows. Thus, the company can support consistent dividend payments.

Utilizing these stable cashflows, Enbridge has become one of the best dividend stocks for long-term income. Currently, it yields over 7.2%, making it attractive to income-seeking investors. Furthermore, a robust portfolio of development projects will drive distributable cash flow growth for decades.

Air Products and Chemicals (APD)

Known for its industrial gases and performance materials, Air Products and Chemicals (NYSE:APD) represents a consistent dividend growth option. The company’s core business of industrial gases is essential for many industrial processes. The vital nature necessitates long-term contracts for uninterrupted operations, guaranteeing stable cashflows for Air Products.

The company is one of the best dividend stocks for the long term for several reasons. First, according to Statista, the industrial gas business is an oligopoly with limited competition. Due to decades of consolidation, four players — Linde (NASDAQ:LIN), Air Liquide (OTCMKTS:AIQUY), Air Products and Taiyo Nippon Sanso — account for over 80% of the global industrial gas supply. Air Products is the third largest player in the industry.

Secondly, Air Products serves a wide range of industries, including electronics, food and beverage, mining, energy, healthcare and manufacturing. This diversification is key to its resilience, as it reduces reliance on any single market segment. As a result, the company enjoys a stable demand base.

This oligopolistic nature of the market and end-market diversification leads to stable revenue. As a result, Air Products has steadily grown earnings, allowing it to pay a healthy dividend. It is one of the top dividend stocks for long-term income, having increased its dividend for 49 consecutive years.

As of this writing, APD stock pays a quarterly dividend and yields 2.68%. Additionally, the 5-year dividend growth rate is 9.73%. Considering the 59% payout ratio and the 49-year record of increases, more payment increases are likely.

Pfizer (PFE)

Pfizer (NYSE:PFE) gained significant attention for its COVID-19 vaccine. However, after a bleak forecast, investors are questioning the sustainability of its revenue growth beyond the pandemic-driven demand. That’s why the stock fell over 40% in 2023. This selloff presents an opportunity in one of the best dividend stocks for long-term income.

After the guidance reset, Pfizer is now focused on its robust development pipeline to deliver long-term growth. Amid the negative Covid-19 vaccine headlines, the company accomplished some impressive milestones last year. Notably, in 2023, it received approval for nine molecular entities, a record for FDA approvals for the company.

Moreover, with the acquisition of Seagen, Pfizer has the potential to become a leader in oncology. According to management, Seagen will contribute over $10 billion in incremental risk-adjusted revenues by 2030.

Excluding Covid revenues, Pfizer is still exhibiting strong growth. Revenue growth is expected to be between 6-8% in full-year 2023. Furthermore, the pharmaceutical company sees over $20 billion in revenues from new molecular entity launches by 2030. Meanwhile, new business development deals are expected to net $25 billion in revenues over the same time frame.

Considering Pfizer’s pipeline strength, it can easily maintain and increase its 5.9% dividend. Over the past decade, the company has raised the dividend consistently. This pharmaceutical company will deliver dividend growth as its pipeline matures.

On the date of publication, Charles Munyi did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.

Charles Munyi has extensive writing experience in various industries, including personal finance, insurance, technology, wealth management and stock investing. He has written for a wide variety of financial websites including Benzinga, The Balance and Investopedia.