Got $500? 3 Dividend Stocks to Buy and Hold Forever

Key Points

• Johnson & Johnson is a Dividend King and a giant in both pharmaceuticals and medical devices.

• Medtronic is a giant medical device maker and is just two years away from being a Dividend King.

• Omega Healthcare isn't raising its dividend, but it maintained it through a harrowing period, and the company's growing again.

• 10 stocks we like better than Medtronic ›

Dividend investing can be tricky, since income-focused investors want to find high yields while also avoiding stocks that end up cutting their quarterly payouts. There's a balance that has to be found, and company quality is highly important to consider. That's why you should be interested in dividend-paying healthcare stocks like Johnson & Johnson (NYSE: JNJ), Medtronic (NYSE: MDT), and Omega Healthcare Investors (NYSE: OHI).

If you have $500 in available cash (or $5,000) that isn't needed for an emergency fund, to pay monthly bills, or to lower short-term debt, you might want to consider using it to buy and hold one of these dividend stocks (or maybe all three).

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 »

1. Johnson & Johnson is a Dividend King

Johnson & Johnson's big draw right now is two-fold. First, it has increased its dividend annually for more than 50 consecutive years, making it a Dividend King. Second, its 2.9% dividend yield is well above the 1.2% of the broader market and the 1.8% of the average healthcare stock. But the big story for buy-and-hold investors is really its business.

Johnson & Johnson is an industry leader in both the pharmaceutical and medical device niches. It has a global reach and industry-leading research and development (R&D) chops, making it a valuable partner to medical professionals around the world. The business will wax and wane over time, since R&D success can be lumpy. But it has a proven record of, eventually, either finding its own new blockbuster product or buying smaller peers that have novel product candidates.

There are some concerns right now about litigation around talcum powder to worry about, but if you don't mind some near-term uncertainty, this high-yield and diversified medical giant is worth a deep dive. A $500 investment would buy you roughly two shares, with $5,000 allowing you to buy 27 shares.

Image source: Getty Images.

2. Medtronic is closing in on Dividend King status

Medtronic has a similar story to Johnson & Johnson, except that Medtronic is focused on just medical devices. That said, Medtronic is diversified across the cardiovascular, neuroscience, medical surgical, and diabetes niches. It has 48 years' worth of dividend increases under its belt, and its 3% dividend yield is high relative to the market, the healthcare sector, and its own yield history. That last comparison suggests that Medtronic's shares are on sale today.

There are some reasons for that, with the company only now coming out of a period in which it didn't introduce many new products. Investors are in a wait-and-see mood, noting that rising costs have also put pressure on the company's profitability. But new products are starting to gain traction, with demand for its new cardiac ablation products pushing that business segment's revenue up nearly 50% year over year in the second quarter of fiscal 2026.

Management is working to improve margins by focusing on the company's most profitable businesses. On that score, the company is spinning off its diabetes business in 2026, a move that is expected to immediately boost earnings.

A $500 investment will get you around five shares of Medtronic, and $5,000 will allow you to buy 55 shares. Either way, you're still getting in early on the business upturn that's starting to take shape right now.

3. Omega Healthcare is still standing tall

Johnson & Johnson and Medtronic are both appropriate for risk-averse investors. Omega Healthcare involves a little more risk. This real estate investment trust (REIT) is focused on owning senior housing, a property niche that took it on the chin during the early stages of the coronavirus pandemic. But, while some other senior housing REITs were cutting dividends, Omega stood behind its payment. It didn't increase the dividend, mind you, but it didn't cut the dividend either, showing that it understood just how important that dividend is to shareholders. The yield is currently an ultra-high 6.4%.

The good news here is that the world has moved past the worst of COVID-19, and the age wave that is cresting into retirement is already pushing a strong recovery in Omega's core business. Funds from operations (FFO), which are like earnings for a REIT, rose nearly 8% year over year in the second quarter of 2025. The company is again starting to invest for the future, making over $500 million in new investments in the quarter.

With Omega's business on the mend, the massive size of the baby boomer generation suggests that the future is going to be bright. You can buy roughly 11 shares with $500, or 119 with $5,000.

A high yield needs a strong business

The big story here is that Johnson & Johnson, Medtronic, and Omega have all proven resilient to adversity over time. The long history of dividend hikes backs that up at the first two companies, and Omega's ability to hold the dividend line through the pandemic proves its dividend bona fides. If you have $500 (or $5,000) to invest in dividend stocks today, any one of these healthcare stocks could easily find a home in your portfolio.

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Reuben Gregg Brewer has positions in Medtronic. The Motley Fool recommends Johnson & Johnson and Medtronic and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.