3 Dividend Stocks for Long-Term Investors

By Dylan Lewis, Rich Duprey, and Keith Noonan Markets Fool.com

Investors can chase the latest trends and find success with investing, but if you're looking for reliable businesses capable of paying shareholders over a long period of time, then often it's best to look at reliable businesses that have paid shareholders over a long period of time.

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That's why three of our contributors thinkCampbell Soup(NYSE: CPB), Lowe's (NYSE: LOW), andPepsiCo (NYSE: PEP)are good places to start for investors looking for a steady stream of income.

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Literally brick and mortar

Dylan Lewis (Lowe's): With all the discussion around the death of retail, it may be surprising to see a brick-and-mortar company that literally sells bricks and mortar on this list.

The reality is many consider the home improvement chain to be "e-commerce-proof," as customers tend to come to the store looking for bulky specialty items, and often need assistance from in-store experts that have years of experience in DIY work.

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That, plus the company's status as a dividend aristocrat, should ease any worries investors have about buying a retail giant.

Lowe's offers investors a reliable base business, with some interesting growth opportunities.Management is guiding to add 10-20 stores per year to the company's existing 2,400 store footprint and expects low single-digit same store sales growth. With that modest growth profile, the company trades more or less in line with the market, at 25 times trailing earnings.

But right now roughly 90% of the company's revenue comes from the United States. If management's plans to double business in Mexico bear fruit, it could provide the business (and investors) a nice little bump.

Even so, the company's top line keeps marching along, fueling the stock's1.7% yield. Right now, Lowe's is only paying out about 40% of earnings with its dividend payments, proving there's plenty of room for the company to continue the aggressive annual increases investors have enjoyed over the past few years.

A go-to for growth

Keith Noonan(PepsiCo): Food and beverage giant PepsiCo has built a reputation for being a go-to choice for income-focused investors, and it's not hard to see why. The stock has reliably outperformed the market when dividend disbursements are accounted for, packs a terrific track record of payout growth, and, most importantly, it's backed by a great business that has the potential to continue enriching shareholders for many years to come.

Few companies can lay claim to a better history of returning income to shareholders than Pepsi, and continued dividend growth looks to be a safe bet. The company has increased its payout for 44 years running and is set to deliver its 45th annual dividend increase this June; that's a stretch that includes six U.S. recessions and points to the likelihood of reliable payout growth even when the broader economy hits a rough patch.

The company's 2.8% yield already sits comfortably above the S&P 500's yield of roughly 1.9%, and, with the annualized cost of distributing its current dividend representing roughly 67% of trailing free cash flow and the company's significant long-term earnings growth potential, there's still room for payout increases.

With a forward P/E of 22, PepsiCo looks like a reasonably priced investment that's poised to live up its reputation as a great dividend stock to hold for the long term.

M-m-mmm good dividends

Rich Duprey (Campbell Soup): Soup maker Campbell Soup is colder than a bowl of gazpacho these days, but its annual dividend of $1.40 per share that currently yields 2.4% still gives investors with a hearty appetite to dine on its stock.

The prepared foods company has come under pressure from changing consumer tastes. Like so many other industries reacting to how consumers shop, Campbell's has felt the pinch as shoppers gravitate toward fresher, healthier foods and avoid the center aisles of the grocery store.

To meet the challenge, Campbell created a fresh foods division two years ago, but it was hit last year by quality issues in its carrot business and had a recall at its Bolthouse beverages unit. It is now cycling through those problems and next year it is looking forward to greater growth, particularly as it offers up some innovations, like premium juices, different colored carrots, and bagged carrots with seasonings, which it is now selling into school systems instead of at grocery stores.

The company is also on track to exceed its $300 million cost-cutting plan a year early. While it noted it had a slow start to the year, business picked back up in March and April, and it ended up growing or maintaining market share in 11 different categories, which represents three quarters of its U.S. retail dollar sales.

Campbell Soup stock is down 15% from recent highs and trades at 18 times next year's earnings estimates. Investors can view its shares as a bit of comfort food and collect the dividend as they wait for the soup maker to get back on track to steaming growth.

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Dylan Lewis has no position in any stocks mentioned. Keith Noonan has no position in any stocks mentioned. Rich Duprey has no position in any stocks mentioned. The Motley Fool owns shares of and recommends PepsiCo. The Motley Fool recommends Lowe's. The Motley Fool has a disclosure policy.