We’re going to look at ten dividend stocks you don't have to babysit.

Meaning, no checking the price every morning. No quarterly earnings report deep dive. No dirty diapers… we hope!

You buy them, check in a few times a year, and go live your life.

And where does the idea come from? This quote:

"Buy a business any idiot could run, because sooner or later, one will."

Everyone says it's Warren Buffett (including me), but Peter Lynch said it first, back in 1989. Buffett just made it famous.

The point is simple. Some companies are so strong that even a bad CEO can't easily wreck them.

And right now I think we're seeing that with one such company.

In August, McDonald's (MCD) CEO Chris Kempczinski basically said, "We didn't execute." Too many new menu items. A value menu that half the restaurants didn't set up right. Not attracting more low-income customers. And now the stock just hit a 52-week low.

My response? This week I bought 2 more shares of McDonald's at $239.25.

Why? One of the things I like to do is to perform the snap test.

Motley Fool co-founder David Gardner likes to imagine this: you snap your fingers and the company vanishes. Instantly and totally gone. Would anyone notice or care?

Snap your fingers on McDonald's and for more than 70 million customers a day, I think they would care. Same with Home Depot (HD), which I added one more share this week at $292.25. The housing market is frozen, but toilets break, ceiling fans fail and contractors and homeowners would absolutely notice.

Those are business’ an idiot could run.

Sometimes the best long-term buys are the ones everybody hates. You hold your nose, click "buy," and it feels a little gross.

And here's how patient owners get paid. Berkshire Hathaway finished buying its Coca-Cola (KO) shares in 1994 for about $1.3 billion. Buffett and Berkshire haven't touched them since. Today they pay Berkshire roughly $848 million a year in dividends (and growing). Every year and for doing nothing.

That's the dream.

So here are the ten and I split them into two teams, in no particular order. Screenshots are from Simply Safe Dividends, as of Sept. 25.

Team "Pays You Now" (higher yields, slower raises)

PepsiCo (PEP) - Most people think of soda, but PepsiCo is really a snack company. Doritos, Cheetos, Fritos, Tostitos - They've got ALL the "ito's"! Doritos and Lay's bring in a big chunk of its profits, but investors are nervous about weight-loss drugs and shoppers switching to store brands, which pushed the yield up near 4.6%, well above its normal level. That's a classic hold-your-nose setup.

McDonald's (MCD) - About 95% of McDonald's restaurants are owned by franchisees who pay McDonald's rent and royalties, so it works more like a landlord than a burger joint. That's why the CEO can botch a value menu, and the checks still show up. It just raised its dividend for the 50th year in a row.

Home Depot (HD) – In the 2008 housing crash, Home Depot's stock got cut in half. But the business stayed profitable and took customers from weaker rivals. Today it's leaning hard into selling to contractors and roofers, because roofs still leak even when nobody's buying houses. Expect only small raises until housing thaws.

Procter & Gamble (PG) - P&G's secret weapon is pricing power: it can raise the price of Tide a little every year, and most people just keep buying Tide. That's how it has raised its dividend 70 years in a row, and it's trading just below SSD's fair value range.

Colgate-Palmolive (CL) – Most of Colgate's sales come from outside the U.S., so you're owning a toothbrush in bathrooms all over the world. The dividend grows slowly, but the stock barely flinches when the market panics. Some days that's exactly what you want.

Coca-Cola (KO) – Coke mostly doesn't bottle its own drinks. It sells syrup to bottlers and lets them handle the heavy, expensive part, which is why its profit margins are so high. The catch is price: it's up big this year and sits above SSD's fair value range, so under $80 looks like a solid buy zone.

Now for team "Pays You More Later" (small yields, fast-growing dividends)

Visa (V) - Visa doesn't lend anyone money and doesn't face loan default risk when people can't pay their credit card bills. It just takes a tiny fee every time a card gets swiped. The more stores accept Visa, the more people want a Visa, and the more stores have to accept it.

Mastercard (MA) - A 0.6% yield looks like a rounding error, but Mastercard raised its dividend about 14% last time. At that pace, a dividend doubles roughly every five years. It's a great lesson in why a small yield today can turn into a big paycheck on what you paid, and SSD thinks it may be undervalued.

Costco (COST) - Costco sells groceries at barely above cost and makes most of its profit from membership fees, and about 9 out of 10 members renew every year. The regular yield is small, but every few years it surprises shareholders with a big special dividend.

Walmart (WMT) - Wall Street now prices Walmart like a tech company, thanks to its online sales and growing ad business. That's why the yield has dropped below 1%. It's a great business with 53 years of raises, but at around $108, the stock is way above SSD's fair value range. I'd love to own it under $85.

So what does "check in a few times a year" mean?

About every three months, when earnings come out, I spend a few minutes per stock on four simple questions:

Is revenue growing? Revenue is the money coming in the door. If it's shrinking, fewer people are buying what the company sells, and it's hard to grow a business (or a dividend) that way. Compare it to the same point last year, or look even longer, since one or two quarters can be a fluke. And a full year or two of sales is really hard to fake.
Is the dividend growing? Compare this year's raise to last year's. Then look at the 5- or 10-year average growth rate, which you'll see called "CAGR." If the raises keep getting smaller, like Home Depot's lately, find out why.
Is the dividend paid for? I look at two payout ratios. The earnings (EPS) payout ratio is easier for companies to manipulate. The free cash flow (FCF) payout ratio is harder to fake, so I lean on it more. But the two should tell roughly the same story. If they're far apart, find out why. I learned that one the hard way with Watsco (and shared in a recent newsletter), when the FCF ratio looked great but part of that cash actually belonged to Carrier. McDonald's passes this check: about 59% on earnings and 67% on free cash flow. That's close enough, and it has lived in that range for years.

And fourth, is there any negative news? Ask a chatbot something like, "Are there any recent red flags with McDonald's that could hurt its long-term growth?" But don't take the answer as gospel. Check the earnings release or call transcript yourself. Or, if you don't want to do that, there's YouTube, Reddit, Seeking Alpha, StockTwits and Blossom which are full of opinions too, and some of them are really sharp!

Just remember this: nobody can predict the future. Not AI, not the internet, not even the CEO. Anything you read about what's going to happen is an opinion until it actually happens. Some of those opinions are educated guesses that point you in the right direction. But they're still guesses.

Do you own any companies that any idiot could run?

Talk soon,
Russ

Not financial advice. I'm an affiliate of Simply Safe Dividends.

Video I'm Watching

One of my favorite CEO's, Joey Agree (ADC), chatted with Brad Thomas of Wide Moat Research. I love his reasoning why they strictly stay in the U.S. retail sandbox... Check it out!

Podcast I'm Listening To

At The Money: Who Is Wealthy...

Sep 23 · Masters in Business

25:28

This interview put yet ANOTHER book on my radar: The Everywhere Millionaire. It's an interview with the authors about Who Is Really Rich in America and How They Got There. Spoiler alert: it's the people who own small businesses, move slow and MAKE things.

Disclaimer: This is not investment advice. Do your own research before making any investment decisions.

😁THANK YOU to all who responded to the last newsletter!!

Check out the portfolio on Blossom, the podcast, or see what’s cooking on YouTube.

And now, here is this week's portfolio activity...

Dividends Received This Week ~$0

None.

Dividends Received 2026 (Schwab Only)~

$3,439.50

Stocks Sold (AVERAGE)

2 Vanguard Total Stock Market ETF (VTI) | $378.40

Stocks Bought (AVERAGE)

2 Home Depot (HD) | $292.25
1 McDonald's (MCD) | $239.25
3 Amplify Intl. Dividend Income ETF (IDVO) | $42.33
3 Schwab Intl. Dividend ETF (SCHY) | $31.95

💰 GOING EX-DIVIDEND THIS WEEK 💰

9/30 Agree Realty (ADC), 4.75% | 70S
9/30m Illinois Tool Works (ITW), 2.51% | 81VS
9/30 Realty Income (O), 5.87% | 80S
10/1 Air Products and Chemicals (APD), 2.57% | 80S
10/2 Bristol-Myers Squibb (BMY), 4.01% | 70S

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