5 Must-Own Dividend Stocks Offer Reliable Passive Income for Life

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Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence. The more passive income can help cover rising costs — such as mortgages, insurance, taxes, and other expenses — the easier it is for investors to set aside money for future needs as they prepare for retirement. Dependable recurring dividends from quality, high-yield stocks are a recipe for success. Five top companies have paid reliable dividends for years and are must-own holdings for passive income investors.

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According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate. It can also include income from limited partnerships, stocks, bonds, and other similar enterprises in which the investor is not actively involved. We have covered passive income dividend stocks for over 15 years here at 24/7 Wall St., and year in and year out, five quality companies that have paid reliably remain among our best ideas for those seeking dependable dividends. All are rated Buy at top Wall Street firms, and all are must-own stocks for investors looking to buy quality companies and own them forever.

Why do we cover passive income dividend stocks?

Since 1926, dividends have accounted for approximately 32% of the S&P 500’s total return, while capital appreciation has accounted for 68%. Therefore, sustainable dividend income and the potential for capital appreciation are essential to total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the 50 years from 1973 to 2023. Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

Altria

This is one of the world’s largest producers and marketers of cigarettes and other tobacco-related products. It offers value investors a compelling entry point and a generous 6.40% dividend yield. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States.

The company’s dividend payout is based on free cash flow, ranging from ~64% to ~80% per quarter. In recent quarters, free cash flow has exceeded dividend payments, providing a solid buffer. Altria generates strong cash flow from its core tobacco business, which provides a stable base, albeit with regulatory risk, and yields are among the highest in the S&P 500, at least for now.

The company primarily sells cigarettes under the Marlboro brand, as well as:

• Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches
• e-vapor products under the NJOY ACE brand

It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev N.V. (NYSE: BUD), the world’s largest brewer. Earlier this year, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.

Goldman Sachs has a Buy rating with a $72 target price.

Dominion Energy

This American energy company is headquartered in Richmond, Virginia. Many of the Wall Street firms we cover remain optimistic about utilities despite the sharp move higher over the last year, and this company pays a sector-high 4.40% dividend. Dominion Energy Inc. (NYSE: D) operates through four segments:

• Dominion Energy Virginia
• Gas Distribution
• Dominion Energy South Carolina
• Contracted Assets

The Dominion Energy Virginia segment generates, transmits, and distributes regulated electricity to residential, commercial, industrial, and governmental customers in Virginia and North Carolina.

The Gas Distribution segment engages in:

• Regulated natural gas gathering
• Transportation
• Distribution and sales activities
• Distributes nonregulated renewable natural gas

This segment serves residential, commercial, and industrial customers.

The Dominion Energy South Carolina segment generates, transmits, and distributes electricity and natural gas to residential, commercial, and industrial customers in South Carolina.

The company’s portfolio of assets included approximately:

• 30.2 gigawatts of electric generating capacity
• 10,500 miles of electric transmission lines
• 85,600 miles of electric distribution lines
• 94,200 miles of gas distribution lines

Dominion serves approximately 7 million customers.

Barclays has an Overweight rating with a $63 target price.

Enterprise Products Partners

Enterprise Products Partners L.P. (NYSE: EPD) is an American midstream natural gas and crude oil pipeline company headquartered in Houston, Texas. This company is one of the most extensive publicly traded energy partnerships, paying a very reliable 6.91% dividend.

The company’s debt-to-EBITDA ratio ranges from 3.1x to 3.4x, which is moderate for a midstream energy company, and its interest coverage ratio is 5x. Enterprise Products Partners generates strong free cash flow, with an operating cash flow of approximately $8.8 billion, resulting in around $4.2 billion in free cash flow annually, after deducting capital expenditures. Another significant benefit for shareholders is that most of the corporate debt is fixed-rate, thereby limiting the risk of rising interest rates.

Enterprise Products Partners provides various midstream energy services, including:

• Gathering
• Processing
• Transporting and storing natural gas, natural gas liquids (NGL), and fractionation
• Import and export terminalling
• Offshore production platform services

The company has four reportable business segments:

• Natural Gas Pipelines and Services
• NGL Pipelines and Services
• Petrochemical Services
• Crude Oil Pipelines and Services

One reason many analysts like the stock might be its distribution coverage ratio. The company’s coverage ratio is well above 1x, making it relatively less risky among the MLPs.

Stifel has a Buy rating with a $38 price objective.

LTC Properties

This healthcare REIT specializes in seniors housing and skilled nursing facilities, offering exposure to the growing healthcare real estate sector with a 6.48% monthly dividend. LTC Properties Inc. (NYSE: LTC) invests in senior housing and healthcare properties through sale-leasebacks, mortgage financing, joint ventures, construction financing, and structured finance solutions, including preferred equity and mezzanine lending.

LTC focuses on senior housing and long-term care facilities, benefiting from the aging U.S. population. Its sale-and-leaseback model generates stable cash flow without landlord responsibilities. As a REIT, it must distribute 90% of taxable income, ensuring reliable dividends. It’s a smaller $1.6 billion market cap, but it still supports consistent payouts.

It invests in various properties, including:

• Skilled nursing centers (SNF), which provide restorative, rehabilitative, and nursing care
• Assisted living facilities (ALF), which serve people who require assistance with activities of daily living
• Independent living facilities (ILF), also known as retirement communities or senior apartments, offer a community and numerous levels of service, such as laundry, housekeeping, dining options/meal plans, exercise and wellness programs, transportation, social, cultural, and recreational activities, on-site security, and others
• Memory care facilities (MC) offer specialized options for people with Alzheimer’s disease and other forms of dementia

JMP Securities has a Market Outperform rating and a $43 target price.

Verizon

Verizon Communications Inc. (NYSE: VZ) is an American multinational telecommunications company, and its shares continue to offer tremendous value. They trade 9.13 times estimated 2026 earnings, come with a 7.06% dividend, and are up almost 9% in 2025. Verizon provides a range of communications, technology, information, and entertainment products and services to consumers, businesses, and government entities worldwide.

Verizon’s trailing 12-month interest coverage ratio is 4.6× to 5.0×, providing ample cushion for dividend payments. With a very predictable revenue stream from telecom services, the company has less exposure to commodity cycles. In addition, the large scale helps in financing and absorbing shocks.

It operates in two segments:

• Verizon Consumer Group
• Verizon Business Group

The Consumer segment provides wireless services across the United States through Verizon and TracFone networks, as well as through wholesale and other arrangements. It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:

• Smartphones
• Tablets
• Smartwatches and other wireless-enabled connected devices

The segment also offers wireline services in the Mid-Atlantic and northeastern United States through its fiber-optic network, Verizon Fios product portfolio, and copper-based network.

The Business segment provides wireless and wireline communications services and products, including:

• FWA broadband
• Data
• Video and conferencing
• Corporate networking
• Security and managed network
• Local and long-distance voice

Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.

Goldman Sachs has a Buy rating and a $49 price target.

Five Monthly Pay Dividend Stocks Offer Boomers and Retirees Income for Life

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