A second revenue’s a dream I’ve been constructing in the direction of for a number of years. It’s not only a need, it’s a necessity — if I hope to attain my purpose of early retirement.

Lately, my mates and colleagues have espoused the spectacular potential of US tech shares on the S&P 500. Positive, they get pleasure from durations of speedy development and plenty of good (and fortunate) buyers have secured respectable returns. However for these with a long-term outlook — who aren’t attempting to time the market — I discover FTSE 100 dividend shares extra preferable.

Assessing longevity

When I attempt to assess the place Tesla or Nvidia shall be in 20 years, it’s troublesome to make certain. They’re each comparatively younger corporations which have loved spectacular success in a brief house of time. However each depend on area of interest markets that, whereas in excessive demand now, don’t have a confirmed future. To not point out the fierce competitors they face!

Comparatively, the UK’s house to a wealth of corporations boasting many many years of dependable efficiency. Whereas the FTSE 100 solely started in 1984, a few of its constituents — similar to Pearson and Diageo — are over 150 years outdated. Phoenix Group, Rolls-Royce, Shell and Barclays are throughout 100 years outdated.

The truth is, there are a minimum of 37 corporations on the listing which are over a century outdated.

Why dividends matter

Clearly, age alone doesn’t make an organization a great funding alternative. If it’s didn’t broaden and develop in that point, one thing could also be missing. One good option to assess that is by dividend development — constantly worthwhile companies have a tendency to extend their dividends yearly with out fail.

Bunzl, for instance, has been growing dividends for over 30 years. Nevertheless, it tends to have fairly a low yield. British American Tobacco has a excessive yield and has been growing dividends for nearly 30 years. However the way forward for the tobacco business is unsure.

Discovering a steadiness

Moderately, buyers might need to contemplate Irish enterprise companies firm DCC (LSE: DCC). The 49-year-old enterprise has an honest 4.7% yield and has been rising dividends for 25 consecutive years. It’s core focus is on investing within the vitality sector.

Regardless of a ten% income drop in 2024, it nonetheless managed to extend its adjusted working revenue by 4.1%. It additionally elevated dividends by 5% to 196.6p per share. Total, dividends have grown at a fee of 9.6% a yr for the previous decade.

Nevertheless, there are some dangers as a result of firm’s publicity to fossil fuels. Lately, it introduced plans to divest its Healthcare and Expertise divisions to focus purely on the Vitality enterprise. The purpose is to simplify operations and improve shareholder returns.

Nevertheless, vitality’s an inherently dangerous business, at present dealing with notable headwinds. Though it’s pushing extra in the direction of inexperienced vitality and renewables, it might take a while earlier than this technique turns a revenue.

Nonetheless, with stable financials and a very good dividend monitor file, I like its long-term prospects. It’s the sort of dependable enterprise that could possibly be a great addition to contemplate for a passive revenue portfolio.