5 Dividend Stocks to Hold for the Next 10 Years

It's easy to love dividends. I mean, who doesn't like earning money while they sleep?

Companies often pay dividends to return some of their profits to investors. A genuinely exceptional business can invest to grow while simultaneously increasing its dividend year after year.

Investors who buy and hold dividend stocks that consistently raise their dividends tend to enjoy strong investment returns over the long haul.

Here are five fantastic stocks investors can comfortably buy and hold for the next decade. Their underlying businesses feature durable growth and competitive advantages that bode well for your portfolio.

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1. Pool Corp.

People love swimming pools. Pool Corp. (NASDAQ: POOL) is the world's largest wholesale distributor of swimming pools and related supplies. The company has steadily built recurring revenue streams over the years as people spend to install new pools, then continually pay for maintenance, repairs, and supplies.

Since new swimming pools can be expensive, the business is prone to economic downturns. That said, management has proven its ability to navigate downturns; the company has paid and raised its dividend for 14 consecutive years. The business has slowed in recent years, making now a potential buying opportunity before consumer sentiment eventually rebounds. Pool Corp. is also one of Berkshire Hathaway's newest holdings.

2. PepsiCo

Food and beverage giant PepsiCo (NASDAQ: PEP) dominates your local grocery store. In addition to a sprawling portfolio of non-alcoholic beverage brands, it also owns a snack foods empire that includes names like Lay's, Doritos, Cheetos, and Quaker, among others. PepsiCo leverages its massive portfolio to win premium shelf space in stores.

While some consumers have begun trading down to cheaper brands, PepsiCo's products generally have solid pricing power due to their immense brand recognition. Also, people always eat and drink, which explains why PepsiCo has increased its dividend for 52 consecutive years. The company's growth may slow due to its vast size, but the fragmented food and beverage market and global population growth almost ensure years of slow and steady growth ahead.

3. Clorox

Household goods are a similarly resilient product space. Clorox (NYSE: CLX) has built an empire on its namesake brand, complementing it with leading brands in niche product categories, including cleaning products, cat litter, water filtration, dressings, and charcoal. Clorox's stock soared on pandemic-fueled growth, but has tumbled following a data breach and a disruptive ERP system upgrade.

The business has historically generated a strong return on invested capital (ROIC), averaging 19% over the past decade. Additionally, the company has proven its resilience by maintaining its dividend growth streak through these challenges and is now approaching five decades of uninterrupted dividend increases. With a dividend yield currently topping 4%, Clorox could deliver a nice combination of income and capital gains if it can continue to get back on its feet.

4. Home Depot

Housing is part of American culture, and people generally enjoy spending money on their primary residence. That has helped Home Depot (NYSE: HD) become the leading home improvement retailer in the United States, and one of the world's largest retailers, period. The company's massive store footprint has helped it embrace e-commerce, while the bulky nature of many home goods and raw materials keeps consumers visiting its stores.

The company and stock are prone to economic fluctuations, as people tend to put off expensive projects during tough times. That said, there is a generational home ownership gap that is bound to create housing turnover over the coming decade as baby boomers age and millennials and Gen Z assume many of those homes. Look for Home Depot to continue building on its 15-year dividend growth streak for the foreseeable future.

5. Philip Morris International

The tobacco industry is transitioning from traditional cigarettes to smoke-free nicotine products. While it's still early, Philip Morris International (NYSE: PM) has become an obvious winner in this race. The company is known for selling Marlboro cigarettes in global markets outside the United States, but began investing years ago in developing today's leading heated tobacco device, Iqos, and then acquired Swedish Match for its popular Zyn brand of oral nicotine pouches.

Cigarettes remain a profitable business, but Philip Morris International already generates more than 40% of its sales from these next-generation products. It bodes well for the company's growth over the next decade. Philip Morris has already raised its dividend every year since spinning off from Altria Group in 2008, and that should continue well into the future, given its leadership in new-age nicotine products.

Justin Pope has positions in Clorox. The Motley Fool has positions in and recommends Home Depot. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.