The dividend strategy that turns time into your best ally. Here are the most solid stocks with stable growth and consistent returns.
There will come a time when you’ll look at your bank account and understand whether you’ve been ahead of the game or not. For many, this moment coincides with retirement and the question is always the same: "will I have enough money to guarantee my usual lifestyle?" This is where a simple, almost banal but effective strategy comes into play, one that few people start early on: build a portfolio that pays increasing dividends every year, regardless of how the market moves.
In 2026 investors may return to focusing on stocks that don’t promise explosive price action but stable earnings, solid business fundamentals, and growing dividends which, if reinvested, can turn into meaningful long-term capital appreciation.
There are at least 5 stocks, scattered across the Italian, European, and US markets, with all the makings of a successful investor reaching 1 million euros by the time they retire. The point isn’t to identify the next “high-beta winner,” but to choose companies that, brick by brick, compound wealth even when you’re not watching the charts.
1) Chevron (CVX)
Some companies follow the oil cycle; others withstand it with remarkable resilience. Chevron belongs firmly to the latter group. For more than thirty years, it has consistently increased its dividend, even during downturns in the energy sector. Its strength lies in robust free cash flow generation, strict capital discipline, and an integrated business model capable of producing value even when crude prices fall.
For long-term income seekers, Chevron is the classic “set-it-and-forget-it” holding. It doesn’t promise speculative rallies, but it does offer something much more valuable: a steadily increasing dividend, currently yielding around 4.6%, supported by a sector that—whether we like it or not—will remain strategically relevant for years.
2) Verizon (VZ)
Among US telecoms, Verizon is the stock income investors often mention first. Why? Because it behaves like a true communications utility: it generates stable operating cash flows, channels them into dividends, and keeps earnings volatility contained. It offers a yield currently around 6.7%, over twenty consecutive years of dividend increases, and is executing a deleveraging strategy that equity analysts generally view positively.
Growth is far from spectacular, of course. But that’s exactly the point. In a retirement-focused portfolio, Verizon handles the heavy lifting: it pays. And it keeps doing so even when markets turn hostile.
3) Enbridge (ENB)
Enbridge is one of those companies seemingly tailor-made for dividend investors: a stable yield between 5.6% and 5.9%, a multi-decade track record of increases, and a regulated midstream business that produces predictable cash flow. But there is also a caveat: the payout ratio, calculated on net income, exceeds 130–145%, which appears excessive. Cash-flow-based payout metrics are more reasonable, but leverage remains elevated, and the current interest-rate environment has a non-negligible impact on financing costs.
Even so, Enbridge continues to deliver solid operating performance. For 2025, management guides for EBITDA between $19.4 and $20 billion, supported by a $35 billion capital backlog providing long-term visibility. It’s not the right stock for investors seeking high growth, but it does suit those who want a resilient, utility-like dividend profile—accepting some regulatory and balance-sheet risk in exchange for one of North America’s most attractive and historically reliable yields.
4) Terna (TRN)
If there is an Italian stock designed for retirement-oriented investors, it is Terna. As the operator of the national electricity transmission grid, it works in a regulated environment with strong visibility on revenues and returns, reinvesting consistently in strategic infrastructure. The outcome is predictable: dividends that have grown steadily for more than a decade, with a yield of around 4.3–4.4% and a payout ratio close to 70%.
In its 2024–2028 strategic plan, Terna forecasts mid-single-digit earnings growth and a more transparent dividend policy, with a guaranteed minimum payout for 2024. It’s one of those stocks that doesn’t disrupt your sleep: low volatility, high resilience, and dividends aligned with the company’s long-term investment plan.
5) Novartis (NOVN)
Novartis is a stock with a long history: it doesn’t spike, it doesn’t crash, it simply grows. The company hasn’t cut its dividend in more than 25 years and has increased it with Swiss consistency. It offers a yield between 3% and 3.3%, a sustainable payout ratio (around 55–60%), and a business model largely insulated from macroeconomic cycles.
Its pipeline is robust, revenue growth remains in the high-single-digit range, and the 2025 guidance has been revised upward. In a retirement portfolio, Novartis serves a clear purpose: provide stability, resilience, and consistent income. No fireworks needed.
How long does it take to accumulate 1 million euros?
To understand whether these stocks can realistically lead to €1 million, two ingredients are essential: time and dividend reinvestment—the most powerful forces in long-term investing.
For simplicity, let’s assume an expected average annual total return of 6% (dividends plus price appreciation), full dividend reinvestment, and no additional contributions.
Suppose we start with €100,000 invested in a portfolio yielding 6% annually thanks to reinvested dividends. Initially, growth seems insignificant. But over the decades, compound interest begins to do what it does best: accelerate.
The result? It takes roughly 40 years to turn €100,000 into €1 million. It’s a long horizon, but that is the nature of compounding: when initial capital is limited, time becomes the main amplifier.
If we lower the initial investment to €20,000, the portfolio would still reach about €206,000 after 40 years. Starting with €50,000 or €75,000 raises the ending values to €514,000 and €771,000, respectively. Still below €1 million, yes, but significantly higher than the starting capital—regardless of the figure.
With the same average return of 6%, the picture changes dramatically when starting from €500,000. Here, compounding begins on a mountain rather than a hill, and the effect becomes immediately visible. In this case, the €1 million milestone arrives in about 12 years.
|DISCLAIMER
The information and considerations contained in this article should not be used as the sole or primary basis for making investment decisions. The reader retains complete freedom in their investment choices and full responsibility for making them, since only they know their risk appetite and time horizon. The information contained in the article is provided for informational purposes only, and its disclosure does not constitute and should not be considered an offer or solicitation to the public.| Original article published on Money.it Italy 2025-12-09 15:29:44. Original title: 5 azioni da comprare ora per andare in pensione con 1 milione di euro
