2 dividend stocks to buy and hold for the next 10 years

Dividend stocks can cushion the blow of a market being stuck in reverse gear. Our writer picks out two examples he’d stick with for the long term.

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It’s never nice to see the value of my portfolio tumble as it has in 2022. One way I can cushion the blow is to own dependable dividend stocks that pay out a proportion of profits to their owners. Doing this means I’ll at least get paid while waiting for the market to recover.

Here are two I’d be quite happy to buy now and hold for the next 10 years.

Top dividend stock

I’ve been wanting to buy shares in Tritax Big Box (LSE: BBOX) for a while now. Unfortunately, they always seemed too expensive for me to pull the trigger with confidence. Thankfully, that situation has now changed.

Tritax is a real estate investment trust (REIT). It owns, develops, and manages logistics buildings (like warehouses) for customers such as Tesco, Next, and Amazon on long leases. That’s generally good news for income seekers, even if no dividend stream can be truly guaranteed. The Covid-19 pandemic served as a reminder of that.

Long-term growth

Of course, the relative stability of Tritax’s business model doesn’t mean that all investors will stick around in a crisis. As evidence of this, shares have almost halved in value in 2022 alone.

That said, this has succeeded in bringing the valuation down to a more palatable level. Shares now trade on an appealingly low price-to-book value relative to the rest of the market.

Naturally, it’s hard to say when things might begin to recover. With a raft of economic issues in the UK, Tritax could be dragged lower regardless of management doing all the right things.

However, I’m fine with gradual capital gains. I also can’t see demand for the sort of assets Tritax owns going out of fashion anytime soon. Consumers may be tightening their belts temporarily but the growth of online shopping will surely continue.

Perhaps most importantly, a 5.3% dividend yield is sufficiently chunky, even if it’s clearly not enough to outgun inflation.

Consistent performer

As interested as I am in finally buying a slice of Tritax, I know that running a diversified portfolio remains essential. That’s why my second pick to hold for a decade (or more) is a million miles away from real estate.

FTSE 250-listed drinks firm Britvic (LSE: BVIC) might not get the pulse racing but, thanks to owning a portfolio of brands that people habitually buy even in troubled times, it’s been a solid performer for dividend hunters for many years. In addition to money consistently hitting holders’ accounts, the payout has been hiked nearly every year (2020 was a rare exception).

Right now, Britvic shares offer a forecast dividend yield of just over 4%. Could I get a bigger yield elsewhere in the UK market? Of course! However, a general rule of thumb for me is that sky-high dividend stocks carry more risk of that passive income being cut. It’s often the case that the yield is large only because the share price has tumbled as a result of concerns about the business. In contrast, Britvic’s payout looks set to be safely covered twice by expected profit.

At a price-to-earnings ratio of 12, I’m considering adding this defensive dividend stock to my portfolio when I have the funds to do so.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon, Britvic, Tesco, and Tritax Big Box REIT. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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