Long-Term Dividend Investments Worth Keeping for a Decade
Two standout investments, Realty Income and Constellation Brands, have recently caught the attention of investors, particularly those seeking reliable dividends and long-term value. Let's delve into the unique aspects of these companies that have earned them a place in Warren Buffett's portfolio.
Realty Income: A Steady Income Stream with Growth Potential
Realty Income, a renowned Real Estate Investment Trust (REIT), is currently positioned as an attractive investment due to its consistent dividend growth, solid returns, and a relatively low valuation compared to peers. The company's stock price is forecasted to have moderate upside in the near term, with estimates reaching around $61.70 for 2025 and up to $86.43 by 2030, representing a potential 50% gain from current levels.
Realty Income boasts a monthly dividend payout and a current dividend yield near 5.4%, well above market averages. The REIT trades at about 13 times forward earnings, which is cheaper than the 18 times multiple of other S&P 500 REITs, making it an appealing choice for income investors.
The company's large size and investment-grade balance sheet support continued access to capital and favorable financing, underpinning its dividend reliability and growth potential. Realty Income owns a vast portfolio of properties across 91 industries, with more than 15,000 properties, and focuses on doing business with tenants that are leaders in their industry, ensuring resilience even during a recession.
Constellation Brands: A Value Opportunity Endorsed by Warren Buffett
Constellation Brands, a leading producer of beer, wine, and spirits, has recently attracted significant investment from Berkshire Hathaway, with Warren Buffett's firm aggressively increasing its stake to about 6.6% of Constellation's market cap as of mid-2025.
Despite a 26% year-to-date decline in its stock price, partly due to falling out of a previously stable trading range, Constellation Brands still offers value-oriented appeal. The company has grown its dividend for nine consecutive years, with a five-year average growth rate of 6% and a ten-year rate of 13.67%, rewarding patient shareholders even amid stock price volatility.
Institutional ownership is high, at over 77%, signaling confidence from professional investors. Buffett’s increased investment underscores value investing principles—buying quality companies with strong financials and attractive dividend yields during periods of temporary underperformance.
While Constellation Brands' beer business posted a sales decline in the low single digits to start the year, its wine and spirits business saw adjusted sales down 13% year over year in the quarter. Management attributes the weak sales to lower demand they view as cyclical. The company recently closed a sale of some of its wine brands to focus on higher-end brands, signaling a strategic shift towards more profitable segments.
In conclusion, Realty Income and Constellation Brands present compelling investment opportunities, each offering unique advantages. Realty Income offers steady dividend income with growth potential supported by a strong balance sheet and favorable valuation, while Constellation Brands presents a value opportunity highlighted by Buffett’s recent buying, supported by a solid dividend growth track record despite current stock price weakness. Both fit Warren Buffett's portfolio criteria emphasizing reliable dividends and long-term value.
- Investors who are seeking to diversify their portfolio with reliable dividends and long-term value may find Realty Income appealing, as it offers a steady income stream with growth potential in real-estate, boasting a consistent dividend growth, solid returns, and a relatively low valuation compared to peers.
- Constellation Brands, a company that has caught the attention of Warren Buffett, is currently a value opportunity for money-conscious investors due to its aggressive investment from Berkshire Hathaway and a nine-year track record of growing dividends, despite a temporary underperformance in the stock market.
- Alongside Realty Income, Constellation Brands presents an attractive option for investors focusing on investing, particularly those seeking real-estate and alcoholic beverages, as it offers a strategic shift towards more profitable segments and a continued focus on growing its dividends over the long term.
