2 Dividend Stocks to Buy for a Lifetime of Passive Income

Defensive industries, like healthcare, are more attractive to income investors. That's because companies in this sector are less likely to suffer significant business disruptions in times of economic trouble, meaning they are also less likely to cut their payouts. Medical needs, unlike many technological products or services, aren't optional. Sure enough, the healthcare industry is home to many excellent dividend stocks. Let's consider two that could reward their shareholders for a lifetime (or more): Merck (NYSE: MRK) and Medtronic (NYSE: MDT).

1. Merck

Merck isn't having a good year: The company's shares are down by 4%. One reason behind the drugmaker's poor performance is that investors are worried about potential competition for Keytruda, Merck's famous cancer drug, which is by far its biggest growth driver. Summit Therapeutics, a clinical-stage biotech, has a medicine in development called ivonescimab that could rival Keytruda in non-small cell lung cancer (NSCLC), one of its key markets.

Furthermore, Keytruda will lose patent exclusivity in the U.S. in 2028 and then face generic competition. That said, Keytruda's revenue should continue growing until 2028 even if ivonescimab hits the market before. The Food and Drug Administration (FDA) has approved the medicine across scores of indications, most of which ivonescimab won't touch before 2028. Merck is also working on a subcutaneous version of the drug. This formulation won't lose exclusivity in 2028 and should be somewhat successful.

Headwinds, such as the ones Merck is facing, are typical for pharmaceutical companies. The healthcare leader has survived and thrived for decades because of its ability to develop new medicines. That's the best defense against competition. And in that department, Merck should still excel. The company's pipeline features several dozen programs. It is also expanding it thanks to acquisitions. Its most-recent, brand-new approval of Winrevair, a medicine for pulmonary arterial hypertension, stemmed from the acquisition of Acceleron Pharma.

Merck also has several collaboration agreements with smaller companies, including Moderna, with which it is developing a personalized cancer vaccine. Here's the point: Focusing too much on Keytruda-related issues might cause investors to miss the forest from the trees. There will always be headwinds in Merck's way, but the things that have allowed the company to last as long as it has remained intact. The company also has a solid dividend record. Its payouts have increased by 71% in the past decade, and it currently offers a forward yield of 2.96%, higher than the S&P 500's average of 1.32%.

Merck remains a reliable income stock to hold onto for good.

2. Medtronic

Medtronic, a medical-device specialist, has a rare dividend streak. The company has increased its payouts for 47 consecutive years. It takes a strong business to pull that off, and that's what Medtronic has. It boasts dozens of products across several categories and operates in more than 100 countries worldwide. That doesn't guarantee that Medtronic will perform particularly well, but the company has several exciting long-term opportunities.

One is within its diabetes care segment, which has been its biggest growth driver lately. Medtronic's innovations in the field include its MiniMed 780G, the only insulin pump with meal-detection technology (it automatically adjusts insulin levels based on patients' needs). With diabetes affecting half a billion adults worldwide, there is a dire need for precisely the kinds of products Medtronic develops. Medtronic is also developing a robotic-assisted surgery device, the Hugo system, that could prove to be an important long-term tailwind.

Intuitive Surgical dominates this market, but given the world's aging population and the increased demand that will place on health systems, the minimally invasive surgeries robot systems allow physicians to perform should become increasingly important. They typically involve less cutting off the skin than open surgeries, and hence less scaring and less bleeding, and shorter recovery times and hospital stays. The Hugo system is currently undergoing clinical trials in the U.S.

Medtronic has had some trouble growing its revenue at a good clip in recent quarters. However, over the long run, the healthcare giant should recover. Medtronic should become a Dividend King within a few years and continue growing its payouts long after.

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Prosper Junior Bakiny has positions in Intuitive Surgical. The Motley Fool has positions in and recommends Intuitive Surgical, Merck, and Summit Therapeutics. The Motley Fool recommends Medtronic and Moderna 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.