Want Decades of Passive Income? 3 Stocks to Buy Right Now

When the market turns south, investors often rush toward conservative investments to fortify their portfolios. Of the many low-risk stocks that they may consider, dividend stocks often find themselves in high demand.

For those keen on identifying stocks that have the potential to deliver steady passive income for not just years but decades, Chevron (NYSE: CVX) and Realty Income (NYSE: O) are great high-yield opportunities with forward-yielding dividends of 4.4% and 5.7%, respectively right now. Meanwhile, Dividend King American States Water (NYSE: AWR), with its 2.4% forward yield, represents another enticing option.

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Now's the time to fuel up on Chevron stock

Markets have been flinching at President Donald Trump's enthusiasm for raising tariffs on U.S. trade partners. Investors' fears are growing, consequently, at the prospect of continued volatility, and energy prices have steadily declined. Despite this, Chevron stock has remained remarkably resilient. While U.S. oil benchmark West Texas Intermediate has fallen more than 8% since the start of the year, Chevron stock has risen over 8%, signaling perhaps that energy investors are confident that the oil supermajor can withstand the volatility.

Enduring volatility -- and continuing to hike the dividend higher all the while -- is something that Chevron has consistently done. The company has raised its payout for 38 consecutive years, a period that has included plenty of downturns in energy prices. While comparable dividend hikes are hardly guaranteed, this feat is an auspicious sign that management is committed to rewarding shareholders.

Moreover, management is confident that the company will generate ample free cash flow in the future, which will further ensure the security of the dividend. The company projects it will generate free cash flow of more than $10 billion in the next two years alone thanks, in part, to two chemicals projects that are currently under construction and growth in production from assets in the Eastern Mediterranean.

Quench your income thirst with American States Water

With a 94-year history of paying dividends and a 70-year history of hiking its dividend, investors would be hard-pressed to find many companies more committed to rewarding shareholders than American States Water. While the company operates the Golden State Water Company, a regulated utility that provides water service, it also owns the Bear Valley Electric Service, which provides electricity distribution to about 25,000 customers in California.

Combined, these two regulated utilities represent the lion's share of the company's business: about 90% of revenue in 2024. In addition, they supply the company with predictable cash flows that, in turn, provides management with a clear sense of how to plan for future capital expenditures like infrastructure upgrades and dividend payments.

AWR EPS Diluted (Annual) data by YCharts.

A look at the company's performance over the past 20 years illustrates the reliability of its business model and sustainability of its dividend. American States Water has excelled at growing both earnings per share as well as dividends for the past two decades.

Realty Income sends dividends your way every few weeks

Looking to procure your passive income sooner rather than later? Realty Income is a name that should shine brightly on your radar. The real estate investment trust (REIT) makes its dividend payments on a monthly basis, and it's been increasing these payments for an impressive stretch of time. Since its initial public offering in 1994, Realty Income has accrued a 30-year streak of consecutive monthly dividend payments -- during which time the company has lifted the payout higher 130 times.

The company is well-suited for passive income enthusiasts since it doesn't expose itself to excessive risk. Investing in diversified real estate, Realty Income has more than 15,600 properties in its portfolio, mitigating the risk of any one property suffering a downturn.

Plus, approximately 98% of its portfolio is comprised of single tenant properties -- mostly with triple net lease agreements. This provides a number of benefits including the ability to sell vacant units individually as well as the fact that clients are responsible for capital expenditures and pay property taxes and all other property expenses.

How to decide which dividend stock is the right choice for you

For income investors who are also looking to pick up stocks while they're hanging on the discount rack, American States Water and Realty Income will be especially appealing as both stocks are trading at discounts to their historic operating cash flow valuations.

On the other hand, Chevron stock, though not sitting in the bargain bin, is still a worthy option for energy investors interested in a dividend stock that steadfastly bumps its payout higher.

Should you invest $1,000 in Chevron right now?

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Scott Levine has positions in Realty Income. The Motley Fool has positions in and recommends Chevron and Realty Income. The Motley Fool has a disclosure policy.