Key Points
-
Pfizer and Johnson & Johnson are healthcare leaders and faithful dividend payers.
-
Home Depot is facing a difficult operating environment, but its core business remains strong.
-
Realty Income is reporting robust occupancy rates.
Dividend stocks can be a profitable component of a long-term investor’s portfolio. Because their payouts provide a fairly reliable flow of cash, such stocks can be particularly appealing for retirees or others seeking passive income that will enable them to meet their liquidity needs without selling shares.
When reinvested, dividends can contribute significantly to your total returns over time. Shares of companies that pay consistent dividends can also help buffer your portfolio during market downturns and periods of economic uncertainty. Importantly, as companies grow their profits, they often increase their payouts, which can help your income stream keep pace with or even outpace your rising expenses.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
With all that in mind, if you have $2,000 available to invest that isn’t needed for monthly bills, to pay down short-term debt, or to bolster an emergency fund, here are four top dividend stocks to consider buying and holding for the next five years (at least).
Image source: Getty Images.
1. Pfizer
Pfizer‘s (NYSE: PFE) streak of consecutive quarterly dividend payments is at 348 and counting. It has also increased its payouts for 16 consecutive years. At the current share price, it offers a substantial forward yield of around 7%, which is significantly higher than the S&P 500 average. The drugmaker’s yield has risen during the last couple of years as negative investor sentiment and market pressures have weighed on the stock price.
Prudent financial management and a focus on cost-reduction initiatives (management is targeting over $7 billion in savings by the end of 2027) are expected to boost Pfizer’s operating margins and free cash flow in the coming years. Its robust cash flow ensures the company can cover its dividend payments while also reinvesting in the business and paying down debt. Pfizer paid $7.3 billion of cash dividends in the first nine months of 2025 alone.
To compensate for the upcoming patent expirations of several of its key drugs over the next several years, Pfizer has been aggressively building its pipeline, both via research and development and through strategic acquisitions. Those efforts were in part fueled by the impressive profits it raked in from its COVID-19 products, demand for which has slid markedly.
For example, its acquisition of oncology-focused biotech Seagen significantly strengthened its cancer treatment portfolio with multiple approved drugs and drug candidates, several of which could become blockbusters by 2030. And, through its recent acquisition of Metsera, Pfizer has entered the lucrative weight loss market with promising mid-stage GLP-1 candidates that could also capture significant market share.
Pfizer delivered $9.4 billion in net income on $45 billion in revenue in the first nine months of 2025. That top-line figure was down modestly year over year, but net income was up by 24%. The pharmaceutical industry is generally quite defensive, meaning demand for its products is less vulnerable to macroeconomic downturns. This stability adds a layer of safety to Pfizer stock as a holding for income-focused investors, and it looks like a great dividend stock to consider.
2. Johnson & Johnson
Johnson & Johnson (NYSE: JNJ) has increased its payouts for 63 consecutive years, so it boasts Dividend King status, and has demonstrated its financial stability through various economic cycles. At the current share price, its yield is around 2.6%, which is more than double that of the average S&P 500 stock at the time of this writing. The company boasts one of the healthiest balance sheets in the healthcare sector, including an AAA credit rating and substantial free cash flow (over $20 billion annually) that provides a wide safety margin for continued dividend payouts and business investments.
Johnson & Johnson is well-positioned to withstand economic downturns because demand for its pharmaceuticals and medical devices remains relatively steady regardless of macro conditions. It has a vast research and development budget and an extensive pipeline of new treatment candidates in high-impact areas like oncology, immunology, and neuroscience.
Some of Johnson & Johnson’s top products include: Darzalex, a treatment for multiple myeloma; Stelara, a biologic therapy for conditions like psoriasis and Crohn’s disease; Tremfya, an immunology treatment for plaque psoriasis and ulcerative colitis; Erleada, a prostate cancer treatment; and Carvykti, a multiple myeloma medication. In Q3 2025, its sales grew by roughly 7% to $24 billion, and adjusted earnings per share (EPS) were $2.80, a 16% increase year-over-year.
J&J is managing a couple of headwinds currently related to long-standing lawsuits involving its talc products, some patent cliff issues, and tariff issues related to China, but it is managing the issues without greatly affecting the bottom line so far. With a healthy dividend payout ratio of around 50%, Johnson & Johnson is able to retain sufficient earnings to manage any added costs and also reinvestment in growth opportunities and potential acquisitions while still consistently increasing its dividend.
3. Home Depot
Home Depot (NYSE: HD) is the largest home improvement retailer in the world, and has increased its dividend annually for 16 consecutive years. The company has paid regular dividends since the 1980s, and at the current share price, its distribution yields 2.7%.
Home Depot’s customers are broadly divided into two main groups: homeowners who need supplies for their own home improvement projects, and professional customers like contractors, builders, and tradespeople who rely on its products for large-scale projects. Home Depot’s recent $5.5 billion acquisition of GMS in 2025 (made through its subsidiary, SRS Distribution) is expected to significantly expand the company’s specialty building products business.
In the third quarter, Home Depot’s sales rose 2.8% year over year to $41.4 billion. That included about $900 million from just eight weeks of sales from its newly integrated GMS business. Comparable sales rose by 0.2%. Net earnings were down slightly from a year earlier, but still totaled $3.6 billion.
Even during a difficult housing market, Home Depot is maintaining a high operating margin and a sustainable payout ratio of around 62%. Most economists anticipate that the housing market will loosen up in the next few years as factors like lower interest rates and generational shifts in home ownership take hold. This would likely lead to increased sales and operating income for Home Depot. In the meantime, long-term investors can reap the rewards of its reliable dividend.
4. Realty Income
Realty Income (NYSE: O) has a flawless record of paying monthly dividends and has increased its payments 132 times since it went public in 1994. The real estate investment trust (REIT) has raised its dividend for 112 consecutive quarters. Moreover, it has been rewarding its investors for even longer than it has been a public company: It just paid its 665th consecutive monthly dividend. Its current dividend yield is in the ballpark of 5.7%.
Most of Realty Income’s properties — which run the gamut from retail to data centers, gaming, and agricultural assets — are single-tenant, freestanding commercial properties leased under long-term, triple-net leases. This means the tenants are responsible for most of the costs associated with the property, which creates a more asset-light and profitable structure for Realty Income. More than 90% of its rental income comes from tenants in businesses that are resilient to economic downturns, such as grocery stores, dollar stores, and industrial and distribution facilities.
No single tenant represents more than 3.3% of its annualized rent. Realty Income’s Q3 revenue was $1.47 billion, up about 11% from a year prior, and adjusted funds from operations (FFO) per share were $1.08, up from $1.05 in Q3 2024.
During the quarter, the company invested $1.4 billion globally and maintained a strong portfolio with 98.7% occupancy. Realty Income pays out about 75% of its adjusted funds from operations (FFO), so it has a cushion to reinvest in new properties while continuing to grow its dividend. A conservative payout ratio and a fortress balance sheet provide the financial flexibility for Realty Income to pursue growth opportunities, and long-term investors can reap the rewards.
Should you invest $1,000 in Pfizer right now?
Before you buy stock in Pfizer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $563,022!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,090,012!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 192% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of November 24, 2025
Rachel Warren has positions in Johnson & Johnson. The Motley Fool has positions in and recommends Home Depot, Pfizer, and Realty Income. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.