Dividend Growth Trumps High-Growth Stocks for Long-Term Income

When it comes to building passive income that lasts a lifetime, some investors are turning away from high-growth stocks in favor of companies with a proven track record of consistent dividend increases. One key point for these investors is to prioritize dividend growth.

Companies known as Dividend Kings have increased their payouts in at least 50 straight years. This showcases management's focus on returning capital to shareholders and highlights the durability of these businesses. Coca-Cola, Lowe's, and Procter & Gamble are examples of such companies, with a combined total of over 200 consecutive years of dividend increases.

The power of patience mixed with persistent dividend growth can be seen in Warren Buffett's investment in Coca-Cola. Berkshire Hathaway owns 400 million shares of the beverage stock, which generates annual passive income of over $848 million - more than half of the conglomerate's initial capital outlay.