3 Dividend Stocks That Should Pay for the Rest of Your Life

By Todd Campbell, Anders Bylund, and Jason Hall Markets Fool.com

8Point3 EnergyPartners (NASDAQ: CAFD), Lowe's Companies (NYSE: LOW), and Pfizer Inc. (NYSE: PFE) may not make headline news every day. But each has a history of rewarding investors with a steady stream of dividend income, and that may make them perfect dividend-paying stocks to add to long-haul portfolios.

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The sun is just rising for this solar investment

Jason Hall (8Point3 Energy Partners): I'll be the first to admit that the two solar manufacturers which sponsor 8Point3 Energy, SunPower and First Solar, are in for a pretty challenging 2017. But investors should understand the difference between the short-term cyclical dynamics of the solar industry and its long-term growth potential, which is still incredibly strong -- and understand where 8Point3 Energy Partners fits into the mix.

IMAGE SOURCE: GETTY IMAGES.

A large portion of the solar panels made and sold each year are for utilities, used for large-scale solar power farms. This segment of the industry can be very cyclical, with demand rising and falling sharply from one year to the next. As panel makers, SunPower and First Solar feel the brunt of those cyclical shifts. If capacity is too low in strong markets, they miss sales opportunities; if capacity is too high in downswings, high expenses cause big losses. Now is a weak period in that cycle.

But 8Point3 doesn't make panels: It makes a living owning and maintaining big solar farms, while selling the power they produce. In other words, it's much more like a utility, generating steady cash flows no matter the market environment for panel sales. But the market seems to have become a bit disconnected from this, pushing its share price down to bargain territory.

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That's created an excellent opportunity for income investors, who can capture a nearly 8% dividend yield at recent prices. And with solar only getting started on a global basis, 8Point3 Energy Partners could be paying dividends for generations to come.

This dividend should never stop improving

Anders Bylund (Lowe's): If you're looking for a strong, sustainable dividend that will keep the payout checks coming for the next few decades, you can't do much better than Lowe's Companies.

The home-improvement retail chain has increased its dividend payouts without fail for each of the last 54 years. Lowe's annual payouts have increased by 150% in the last five years and sixfold over the past decade.

The resulting dividend yield may seem skimpy, clocking in it just 1.6%, but don't forget that the rising payouts have had to measure themselves against soaring share prices. That's a nice problem to have, even if it puts a damper on the floating dividend yield:

LOW data by YCharts.

The best part? Lowe's is likely to keep the dividend growth flowing for many years.

The company currently spends just 25% of its free cash flows on dividend checks, leaving lots of room for further payout boosts. If the cash backing should run thin in the future, Lowe's has allocated roughly 75% of its free cash flows to share buybacks -- another shareholder-friendly expense that can be restrained in favor of higher dividends, and all without scaring away income investors.

On top of that, Lowe's management has stated a commitment to returning excess cash to shareholders. The balance between buybacks and dividends may change over the years, but the stream of cash flows straight into shareholders' pockets should remain torrential.

No investment is ever 100% guaranteed to stick around for the long haul, but Lowe's runs a simple retail business in a sector that will stay relevant as long as people need houses to live in and maintain. This dividend will stick around, and keep growing stronger in the long run.

A cash flow dynamo

Todd Campbell (Pfizer): Fellow Fool Keith Speights reminded us recently that Pfizer's operating cash flow was $15.9 billion (yes, billion) last year, and with that kind of money sloshing around, it's easy to understand why I think Pfizer is a great stock for dividend investors to buy and hold long-term.

Sure, cash flow at biopharma companies can take a hit when drugs lose patent protection, but Pfizer's track record shows that it can digest even the hardest of hits to its top line. After all, Pfizer's sales took a massive hit in 2011 when the $13 billion-per-year drug Lipitor lost its patent protection, yet its dividend has increased steadily over the past five years, and I think that can continue:

PFE Dividends Paid (TTM) data by YCharts.

The company's next big patent loss is on Lyrica in 2019, but I think investments in research and development and in acquisitions should help offset any revenue lost to generic competitors; if I'm right, those investments should keep dividend checks flowing.

Since 2015, Pfizer has successfully launched the fast-growing breast cancer drug Ibrance. It's also acquired the multibillion-dollar-per-year prostate cancer drug Xtandi, the promising eczema drug Eucrisa, and a slate of intriguing biosimilars that could eventually add billions of dollars in annual sales.

In short, Pfizer's got tremendous financial firepower, and it's shown that it's not afraid to use it to develop -- or buy -- sales and profit growth. With a dividend yield of 3.7%, a rock-solid balance sheet, and plenty of cash flowing in, picking up shares when they're trading at only 12 times forward earnings estimates seems pretty smart.

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Anders Bylund has no position in any stocks mentioned. Jason Hall owns shares of First Solar and SunPower. Todd Campbell owns shares of Pfizer.His clients may have positions in the companies mentioned.The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.