Want Decades of Passive Income? 2 Stocks to Buy Now and Hold Forever

Who doesn't love a good dividend stock? The companies that focus primarily on their dividend as a way of generating shareholder returns tend to be safe, steady growers that an investor doesn't need to worry much about.

When you buy a dividend stock, you can set up a dividend reinvestment plan (DRIP) and let your money work for you, compounding over the years you hold the stock. It can be a low-stress, high-safety way to invest. Even if you have a higher risk profile in your portfolio, dividend stocks are usually a good hedge against your riskier plays, so any investor can find a use for them.

The two stocks featured here are some of the best on the market, and both still have plenty of room to grow their dividends.

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Home Depot: The leader in home improvement

Home Depot (NYSE: HD) is the world's largest home improvement retailer. Tools, plumbing supplies, appliances, paint -- you name it, Home Depot sells it. And despite a small dip in earnings for its latest reported quarter (the 2025 third quarter), the company remains highly profitable with plenty of room to keep raising its dividend.

Right now, the retailer has a 15.4% margin (as measured by earnings before interest, taxes, depreciation, and amortization) and a net profit margin of 8.7%.

It pays a per-share dividend of $2.30 per quarter, or $9.20 per year, which is good for a yield of 2.4% at current share prices. Its payout ratio of 62% is a little higher than its historical average, but indicates the company has plenty of room to keep paying its investors. It might even increase it, as it has in each of the past 16 years.

If you're seeking a high-yield dividend payer, give Home Depot a look and see if it can't help improve your portfolio as well as your home.

Chevron: Oil isn't dead yet

Despite a global push for increased reliance on green energy sources like wind, solar, and nuclear, our world still runs on oil. And it's likely to keep doing so for the foreseeable future. That's why I think Chevron (NYSE: CVX) will have no issue keeping its 38-year streak of annual dividend increases going until it hits Dividend King status in 12 years or so.

The company has the highest cash flow from operations and production growth among its peers, with both metrics projected to have a two-year compound annual growth rate (CAGR) of 10% between 2024 and the end of 2026. Chevron has raised its free cash flow guidance for the end of 2026 by $12.5 billion. It also forecasts an adjusted free cash flow CAGR of 14% through the end of the decade.

So, despite a high payout ratio of 95% at present, I don't think Chevron will have an issue drumming up the cash to continue paying and raising its dividend. And the company has reduced its payout ratio while keeping its dividend growth streak going in the past. In 2017, it had a payout ratio of 89%, which it reduced to 57.8% for 2018.

Right now, Chevron's dividend yields 3.83%, and I think it's one to look at for your dividend portfolio in a world still addicted to oil and gas.

James Hires has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron and Home Depot. The Motley Fool has a disclosure policy.