Want a Lifetime of Passive Income? Buy Realty Income Stock in July and Never Sell.

Finding good dividend stocks isn't too tall a task. Finding dividend stocks you can feel good about buying and holding forever, however, is a different story. The world is constantly changing. Companies that are firing on all cylinders today may be irrelevant tomorrow.

But there are some businesses that are just built to last, and to pay a reliable dividend as long as they do. Realty Income (NYSE: O) is one of those businesses.

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Built tough

It's not exactly a household name, although it's likely that you or someone in your household regularly steps into one of its properties. Realty Income is a real estate investment trust (REIT), and as such, it owns a portfolio of commercial real estate that it rents to other companies. Realty Income's specialty is brick-and-mortar retailing.

At first blush, this seems risky. The so-called retail apocalypse is still underway, after all. Realty Income is largely defying it, though. With top-20 tenants like Dollar General, FedEx, Home Depot, and Walmart, this REIT is reliably able to maintain occupancy rates in excess of 98%. Even during pandemic-riddled 2020, its full-year occupancy only slipped to 97.9%.

This resiliency is translating into ultra-reliable monthly dividends and dividend growth for shareholders. Not only has the company paid a monthly dividend like clockwork since its founding in 1969, but it has also raised its per-share payout every quarter since 1998.

And by more than a little. Over the past 10 years, its monthly payment has improved from $0.2115 per share to $0.2710. This dividend growth paired with the stock's capital appreciation has produced a compound average annual return of 13.6% since Realty Income was listed on the New York Stock Exchange in 1994.

Willing and able to adapt, too

It's possible that the traditional brick-and-mortar retailing sector could continue deteriorating under the weight of e-commerce's proliferation, to the point where even rock-solid Realty Income starts to struggle. Meanwhile, higher interest rates are a temporary headwind.

But while that's possible, it's not likely. There's plenty of consumer-facing retailing that will never quite work online, and to the extent online shopping poses a threat to the business, many of Realty Income's tenants like Walmart also have e-commerce operations to go with their brick-and-mortar segments. Or they are businesses like FedEx that benefit from online shopping's continued growth.

Even so, concerned investors should know that Realty Income's management is testing the waters of other markets, including artificial intelligence (AI) infrastructure by partnering with AI data center owner/operator Digital Realty on new facilities. While this isn't a significant business yet, Realty Income's willingness to entertain obvious opportunities is encouraging.

Even more encouraging is that Realty Income doesn't need to rush into these new markets. It can take its time, since its well-established retailing portfolio remains a reliable cash cow. This sort of well-managed flexibility ultimately translates into longevity.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Digital Realty Trust, Home Depot, Realty Income, and Walmart. The Motley Fool recommends FedEx. The Motley Fool has a disclosure policy.