Passive income is a dream for many investors, but with the right strategy and investment choices, it can become a reality. Building a portfolio of dividend stocks is a popular way to generate consistent cash flow over time. Two top dividend stocks that offer the potential for long-term passive income are Waste Management (NYSE: WM) and AT&T (NYSE: T).
Waste Management is a leading provider of waste management services in North America. The company’s core business of trash collection and recycling services is essential and recession-resistant. Waste Management benefits from a strong competitive advantage due to homeowner opposition and stringent regulations that make it difficult for competitors to enter the market. This positions the company well for continued growth and profitability in the future.
In addition to its core operations, Waste Management pursues growth through strategic acquisitions. The recent acquisition of Stericycle, a leading provider of medical waste disposal services, is expected to enhance the company’s cash flow generation in the coming years. Waste Management has a solid track record of increasing its dividend for 22 consecutive years, making it a reliable choice for passive income investors. Currently, the stock offers a dividend yield of 1.5%.
AT&T is a telecommunications giant known for its bundled wireless and broadband internet services. The company’s diversified offerings give it a competitive edge in the market, attracting customers who value simplicity and cost-savings. AT&T’s strong customer base and consistent growth in postpaid phone and fiber internet subscribers contribute to its robust cash flow generation.
AT&T is committed to rewarding its investors with a generous dividend yield of 4.5%. The company plans to increase its free cash flow to over $18 billion by 2027, enabling it to return $40 billion to shareholders through dividends and share repurchases over the next three years. AT&T’s focus on debt reduction and improving its balance sheet further enhances its long-term growth prospects.
Both Waste Management and AT&T offer investors the opportunity to build a steady stream of passive income through dividends. These companies have strong fundamentals, reliable cash flow generation, and a history of rewarding shareholders with consistent dividend payments. By investing in these rock-solid dividend stocks, investors can potentially receive cash payments for the rest of their lives, making their passive income dreams a reality.
