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

There are no guarantees on Wall Street, and even reliable dividend stocks can end up cutting their payouts. For example, W.P. Carey, on the cusp of what would have been its 25th consecutive annual increase, instead had to reset its dividend lower at the start of 2024. But there are some dividend payers that stand out for the reliability of the passive income they produce. If you are looking to collect dividends for decades, you'll want to examine Federal Realty (NYSE: FRT), Toronto-Dominion Bank (NYSE: TD), and Bank of Nova Scotia (NYSE: BNS) right now.

1. Federal Realty is the Dividend King of REITs

To get the big number out first, real estate investment trust (REIT) Federal Realty has increased its dividend annually for 57 consecutive years. Management believes that's the longest streak of any REIT, and it puts the company into the elite group known as Dividend Kings. To earn and maintain entry into that club, a company must have an active streak of 50 or more annual payout increases -- something that few have accomplished. There are no signs that Federal Realty is about to let its incredible streak come to an end.

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The REIT focuses on strip malls and mixed-use assets. The majority of its properties contain grocery stores, which draw traffic to its retail centers. None of this is unique. What sets Federal Realty apart among REITs is the modest size of its portfolio, which usually sits at around 100 properties. Unlike some of its peers that simply try to grow as large as possible, Federal Realty is looking to own only the best assets in the best locations with a quality-over-size mentality. That's worked out well for its investors. Add in a dividend that at the current share price yields a well-above-market-average 4.3%, and it's easy to see why income investors will like the stock.

2. Toronto-Dominion Bank will survive this difficult period

Toronto-Dominion can't claim to be a Dividend King, but it has paid dividends every year since 1857. Another not-so-minor fact here is that TD Bank, as it is more commonly known, maintained its dividend through the Great Recession, a period of time during which many of the largest U.S. banks cut their dividends. And right now the dividend yield of this giant Canadian bank is a historically attractive 5.1%.

That said, there is a risk/reward trade-off to consider. TD Bank recently got in trouble with U.S. regulators because criminals were able to use its U.S. banking operations to launder money. TD Bank was hit with a large fine, and is now investing in efforts to improve its internal controls. It's also under an asset cap in the United States: It won't be able to increase its U.S. assets until it proves to regulators that it has fully addressed the failures that allowed that money laundering to take place. Since there's not much growth to be had in its Canadian home market, the bank had expected to rely on the U.S. market for growth. In response to all of this, the market bid the stock down. That's understandable for traders with short-term mindsets, but if you're making investments with decades in mind, well, this is a buying opportunity.

The TD Bank story is ugly right now. But given its strong foundation in Canada and its long history of rewarding investors with dividends (it just hiked its payout again, despite its problems), even conservative investors should be looking at this bank today.

3. Bank of Nova Scotia is playing catch-up

If you think TD Bank has an impressive dividend record, Bank of Nova Scotia, also known as Scotiabank, can top it: It has paid dividends every year since it started paying dividends in 1833. Meanwhile, Scotiabank's dividend yield -- 5.3% at the current share price -- is even higher than its Canadian peer. Unlike TD Bank, however, Scotiabank hasn't run afoul of any regulators.

The problem here is that Scotiabank had tried to differentiate its business by skipping over the United States and expanding into Central and South America. That didn't work out as well as hoped because those economies are volatile. It is shifting gears now, getting out of less desirable markets, focusing on more attractive ones, and investing more heavily in growing its footprint in the U.S. market. There's no fast fix here -- Scotiabank's turnaround effort will likely play out over many years. But given its dividend history, its high yield, and the early results of its repositioning efforts (it bought a nearly 15% stake in KeyCorp and has quickly reduced its exposure in Central and South America), the rewards are likely to outweigh the risks for long-term investors.

Three options for long-term dividend investors

What's notable about Federal Realty, TD Bank, and Scotiabank is the reliability with which they have paid dividends. Federal Realty stands out for its Dividend King status, but TD Bank and Scotiabank are clearly no dividend slouches. The higher yields offered by the two Canadian banks do come with higher risks, but their risk/reward balances look to be tilted in the right direction if you think about your investments in terms of decades and not days.

Should you invest $1,000 in Federal Realty Investment Trust right now?

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Reuben Gregg Brewer has positions in Bank Of Nova Scotia, Federal Realty Investment Trust, Toronto-Dominion Bank, and W.P. Carey. The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy.