1. Eli Lilly (LLY)
Eli Lilly, a healthcare giant, has been paying dividends since 1885, making it one of the most reliable dividend stocks over the past 140 years.
There is little reason to believe this impressive consistency will end anytime soon. Over the past three years, the company has maintained an impressive 22% profit margin on average.
With high margins and strong growth opportunities, Eli Lilly is not only able to pay dividends but also increase them regularly. In December 2022, the company announced a 15% dividend increase, bringing its current yield to 1.4%.
While this is lower than the S&P 500’s average of 1.7%, Eli Lilly’s payout ratio remains below 60%, leaving room for further increases. Given its growth potential and financial stability, Eli Lilly could be a solid long-term income stock.
2. ExxonMobil (XOM)
ExxonMobil has benefited from strong commodity prices, making it one of the top-performing oil and gas producers over the past year. The company set a record in 2022 with $56 billion in net income, despite having suffered a $22 billion net loss in 2020. However, even in tough years, Exxon continued to pay dividends.
ExxonMobil has been paying dividends uninterrupted since 1882, and not only has it continued paying, but it has also increased dividends for over 40 consecutive years. Over this period, its quarterly dividend payments have grown at an annual rate of 5.9%.
Exxon has proven to be a resilient company, and owning its stock can be a great way to diversify a portfolio, especially during times of high inflation. While its 3.5% dividend yield is not the highest on this list, it remains a solid income investment.
3. Toronto-Dominion Bank (TD)
Bank stocks may not be the most popular investment right now, especially after the collapse of Silicon Valley Bank. However, in Canada, banks operate under strict regulations, making them much safer investments. Large, established banks like Toronto-Dominion (TD) dominate the industry with limited competition, which means they have less need for aggressive lending practices.
TD’s dividend yield is particularly attractive. At 5%, it is significantly higher than its historical average. Additionally, the payout ratio is a manageable 44%, indicating that the dividend is sustainable.
Over the past 12 months, the company posted $15 billion CAD ($11 billion USD) in net income with a 31% profit margin. Economic downturns may pose challenges, but like previous recessions, TD is expected to recover strongly.
With a strong presence in both Canada and the U.S., TD remains one of the top bank stocks to own. Currently, it is trading near its 52-week low due to broader banking sector concerns. However, given its solid fundamentals, the recent sell-off presents a great buying opportunity for long-term investors.
