Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade or business in which the individual does not materially participate. It can also include income from limited partnerships and other similar enterprises where the individual is not actively involved.
Investors looking for defensive companies paying big dividends are drawn to the Dividend Aristocrats, and with good reason. The 69 companies that made the cut for the 2025 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. But the requirements go even further, with the following attributes also mandatory for membership on the Dividend Aristocrats list:
- Companies must be worth at least $3 billion each quarterly rebalancing.
- Average daily volume of at least $5 million transactions for every trailing three-month period at every quarterly rebalancing date.
- Be a member of the S&P 500
We screened the 2025 Dividend Aristocrats looking for the companies Wall Street endorses for passive income investors. We found five that investors can buy now and hold forever. All are rated Buy at top Wall Street firms.
Amcor
This is a very off-the-radar idea, but it makes sense as it produces products that are always needed and pays a robust 6.3% dividend. Amcor PLC (NYSE: AMCR | AMCR Price Prediction) manufactures and sells packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions.
The company operates through two segments:
- Flexibles
- Rigid Packaging
The Flexibles segment provides flexible and film packaging products in food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries.
The Rigid Packaging segment offers rigid containers for a range of beverage and food products, including:
- Carbonated soft drinks
- Water
- Juices
- Sports drinks
- Milk-based beverages
- Spirits
- Beer
- Sauces
- Dressings
- Spreads
- Personal care items
- Plastic caps for various applications.
The company sells its products primarily through its direct sales force.
Chevron
Chevron is an American multinational energy corporation predominantly specializing in oil and gas.
This integrated giant is a safer way for investors looking to get positioned in the energy sector, and it comes with a rich 4.59% dividend. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries.
The company operates in two segments:
- Upstream
- Downstream
The Upstream segment is involved in the following:
- Exploration, development, production, and transportation of crude oil and natural gas;
- Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
- Transportation of crude oil through pipelines
- Transportation, storage, and marketing of natural gas, as well as operating a gas-to-liquids plant
The Downstream segment engages in:
- Refining crude oil into petroleum product
- Marketing crude oil, refined products, and lubricants
- Manufacturing and marketing renewable fuels
- Transporting crude oil and advanced products by pipeline, marine vessel, motor equipment, and rail car
- Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives
Warren Buffett’s Berkshire Hathaway owns 6.1% of Chevron’s outstanding stock with 122,064,792 shares, and the energy giant makes up 5.8% of the portfolio. Each year the stock generates $835,821,832 in dividend income for Berkshire Hathaway.
Franklin Resources
Franklin Resources, one of the world’s largest investment managers, is better known as Franklin Templeton.
This company is a mutual fund powerhouse that pays a safe and secure 5.51% dividend. Franklin Resources Inc. (NYSE: BEN) is among the most prominent global money managers.
The firm markets mutual funds and institutional separate accounts under the Franklin, Templeton, and Mutual Series brands. At times, 50% of its sales are from outside the United States, an advantage given the maturing U.S. market.
Franklin Resources offers its products and services under these brands:
- Franklin
- Templeton
- Franklin Mutual Series
- Franklin Bissett
- Fiduciary Trust
- Darby
- Balanced Equity Management
- K2
- LibertyShares
- Edinburgh Partners
The Stock is up 4.24% in 2025 and more recently the stock has performed even better, up 15.44% over the past 6 months.
IBM
IBM, nicknamed Big Blue, is an American multinational technology company.
The legacy blue chip tech giant pays a solid 2.16% dividend and offers conservative investors a safer way to play the sector. International Business Machines Corp. (NYSE: IBM) together with its subsidiaries, provides integrated solutions and services worldwide.
The company operates through four segments:
- Software
- Consulting
- Infrastructure
- Financing
The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate.
The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry.
The Infrastructure segment provides on-premises and cloud-based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment.
The Financing segment offers client and commercial financing, facilitates IBM clients’ acquisition of hardware, software, and services.
The company has a strategic partnership to various companies including:
- Hyperscalers
- Service providers
- Global system integrators
- Software and hardware vendors such as Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP
Realty Income
Realty Income invests in free-standing, single-tenant commercial properties in the United States, Spain, and the United Kingdom.
This is an ideal stock for growth and income investors looking for a safer contrarian idea for 2026 and beyond, that pays a whopping 5.59% dividend. Realty Income Corp. (NYSE: O) is an S&P 500 company that provides stockholders with dependable monthly income.
The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 15,542 real estate properties owned under long-term lease agreements with commercial tenants.
The company has declared 664 consecutive common stock monthly dividends throughout its 56-year operating history and increased the dividend for 112 consecutive quarters.
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