3 Stocks to Buy Now for Long-Term Passive Income

Investing in dividend-paying stocks offers a reliable way to generate passive income while building wealth over the long term. The best opportunities often come from companies that consistently increase their dividends and maintain a strong market presence. Businesses in the healthcare and related industries stand out as excellent options due to their stability and consistent demand.

Here are three stocks that can secure steady income for decades.

1. Eli Lilly – A Leader in Pharmaceuticals

Eli Lilly (NYSE: LLY) is a powerhouse in the global pharmaceutical sector, valued at an estimated $1.5 trillion. This industry leader specializes in developing treatments for obesity, diabetes, neuroscience, immunology, and oncology. Currently, the company is at the forefront of GLP-1 agonists, including “Mounjaro” and “Zepbound,” which are pivotal in treating diabetes and obesity by curbing appetite and aiding digestion.

Instagram | marksmendaily | Eli Lilly drives growth with innovation.

The market for these drugs is expected to grow from $25 billion in 2024 to $55 billion by 2031, presenting significant opportunities for expansion. Eli Lilly projects its sales to reach between $58 billion and $61 billion by 2025, marking a remarkable 32% growth. Additionally, analysts anticipate the company’s earnings will grow at an average annual rate of 38% over the long term.

Eli Lilly reinvests heavily in its future, allocating $6 billion to $12 billion annually for research and development. This ensures a steady pipeline of innovative treatments and growth opportunities.

Although the dividend yield is modest at 0.6%, the company’s payout ratio stands at only 25%, leaving plenty of room for consistent dividend increases. Investors can look forward to sustained growth and compounding returns over time.

2. Zoetis – Dominating Animal Health

Zoetis (NYSE: ZTS) has carved a niche in the animal healthcare industry, excelling in vaccines, diagnostics, and medicines for livestock and companion animals. The company benefits from two major trends: increasing demand for animal protein and growing spending on pets, particularly among younger generations.

Image by Zoetis | Zoetis grows with rising pet care.

Originally part of Pfizer, Zoetis has operated independently since its 2013 IPO, achieving an impressive annual revenue growth rate of 8%. The company’s commitment to innovation and its strong market presence make it a standout choice for investors.

Zoetis offers a dividend yield of 1%, which may appear modest. However, its low payout ratio of 26% and annualized earnings growth of 8% to 9% position it for significant future dividend increases. Over the years, Zoetis has demonstrated its ability to deliver consistent double-digit year-over-year dividend growth, making it an excellent choice for long-term investors seeking steady income and growth.

3. Kenvue – Stability and High Dividend Yield

Kenvue (NYSE: KVUE), a recent spinoff from Johnson & Johnson, has quickly established itself as a dependable player in consumer healthcare. The company’s portfolio includes household names such as Tylenol, Neutrogena, Band-Aid, and Aveeno. These trusted brands ensure consistent demand, making Kenvue a stable choice for income-focused investors.

Instagram | ipobanner | Kenvue offers stability with steady income growth.

Offering a dividend yield of 3.9%, Kenvue provides an attractive starting point for investors seeking immediate income. The company maintains a healthy payout ratio of 66%, which leaves room for steady annual dividend growth. Analysts project earnings growth of approximately 5% annually, supported by the enduring popularity of its products.

Kenvue’s established brands and strong market position make it a reliable source of passive income. Its history of consistent performance, inherited from Johnson & Johnson, adds to its appeal for investors seeking stability.

Why These Stocks Stand Out

All three stocks—Eli Lilly, Zoetis, and Kenvue—offer unique advantages that cater to different investment goals. Eli Lilly combines rapid growth with consistent dividend increases, making it ideal for long-term wealth accumulation. Zoetis dominates an often-overlooked market with strong growth potential, while Kenvue provides stability and an attractive dividend yield for income-focused portfolios.

By incorporating these companies into a diversified portfolio, investors can enjoy both growth and consistent income for decades. These stocks represent industries with enduring demand and robust growth opportunities, making them excellent choices for securing financial stability over the long term.