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How to live off dividends entirely: Top stocks that hiked payouts for 60 straight years Back to video

For people who thought stocks would only go up, 2022 has delivered a blunt reality check. The benchmark S&P 500 Index is down 16 per cent year to date, while the Nasdaq Composite plunged 29 per cent. Likewise, the S&P/TSX Composite Index is down a milder 3 per cent year to date.

But you don’t necessarily need a rallying market to make money in stocks — you can also collect dividends.

Healthy dividend stocks have the potential to:

To be sure, if you want to live 100 per cent off dividends, you should look for more than just the highest-yielding names. Dividends are not carved in stone. When times get tough, dividends can and do get cut.

But some companies have the ability to return generous amounts of cash to investors through thick and thin.

Better yet, some companies have consistently raised their dividends over time.

Here’s a look at three of them. Wall Street also sees upside in this trio.

Don’t miss

Coca-Cola (KO)

Coca-Cola is a classic example of a recession-resistant business. Whether the economy is booming or struggling, a can of Coke is affordable for most people.

The company’s entrenched market position, massive scale, and portfolio of iconic brands — including names like Sprite, Fresca, Dasani and Smartwater — give it plenty of pricing power.

Add solid geographic diversification — its products are sold in more than 200 countries and territories around the globe — and it’s clear that Coca-Cola can thrive through thick and thin. After all, the company went public more than 100 years ago.

More impressively, Coca-Cola has increased its dividend for 60 consecutive years. The stock currently yields 2.8 per cent.

UBS analyst Peter Grom has a ‘buy’ rating on Coca-Cola and a price target of $68 — roughly 9 per cent above where the stock sits today.

Those looking to take control of their investments should certainly explore online trading platforms. The best sites offer resources and tools to help investors make informed decisions as they build and manage their investment portfolios.

Johnson & Johnson (JNJ)

When it comes to delivering recession-proof returns, few companies have done a better job than healthcare giant Johnson & Johnson.

The stock has been trending up for decades and for good reason. Johnson & Johnson’s business grows consistently through economic cycles.

Many of the company’s consumer health brands — such as Tylenol, Band-Aid, and Listerine — are household names. In total, JNJ has 29 products each capable of generating over $1 billion in annual sales.

Over the past 20 years, Johnson & Johnson’s adjusted EPS has increased at a steady pace of 8 per cent annually.

And that means shareholders can look forward to higher dividends every year.

JNJ announced its 60th consecutive annual dividend increase in April and now offers an annual dividend yield of 2.6 per cent.

Raymond James analyst Jayson Bedford has an ‘outperform’ rating on JNJ and a price target of $185 — around 5 per cent above the current levels.

Procter & Gamble (PG)

Procter & Gamble has an even longer dividend growth track record than Coca-Cola and Johnson & Johnson: the company has raised its payout to shareholders for 66 consecutive years.

That streak is a testament to its entrenched position in the consumer staples market. P&G has a portfolio of trusted brands like Bounty paper towels, Crest toothpaste, Gillette razor blades and Tide detergent.

These are products that households buy on a regular basis, regardless of what the economy is doing. As a result, the company can deliver reliable dividends even in tough times.

The latest dividend hike was announced in April, when the board of directors approved a 5 per cent increase to the quarterly payout to 91.33 cents per share. The stock currently yields 2.5 per cent.

Jefferies analyst Kevin Grundy has a ‘buy’ rating on Procter & Gamble and recently raised his price target from $149 to $164. That implies a potential upside of 12 per cent.

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174 per cent over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But fine art., you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

This article was created by Wise Publishing. Wise is devoted to providing information that helps readers navigate the complex landscape of personal finance. Wise only partners with brands it trusts and believes may be helpful to the reader. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.