Passive income for life? I would consider buying these dividend stocks

I expect a volatile stock market to provide me with lifelong passive income in the form of dividends It may sound like I’m asking for too much. After all, no company is forced to return money to its investors. And even if they want to, it may not always be possible.

But I do think there are some UK stocks that have a better chance than most of delivering good results year on year.

How to find top dividend stocks

I pay attention to a few things when it comes to dividend stocks. The first would be a good track record of returning cash to shareholders in the past.

Sure, that one’s a bit obvious. But I’m not looking for perfection here. Every company’s profits are cyclical to some extent, and one or two glitches in a record aren’t enough to deter me. But I at least want to see it some coherence.

I also want more money to be paid out as the years go by. This indicates that everything is well managed and revenues are growing nicely. In other words, dividends cannot be tampered with. So I can probably sleep easy if I get extra pennies per share every year.

That’s why I think it’s fine to invest in a stock with only an average or even small value dividend yield as long as it grows. Over a period of many years, returns can accumulate. To me, this is infinitely better than buying shares in companies with only the highest cash distributions. “What seems too good to be true…” and all that.

Best in its class

Using the above criterion gives me FTSE 100 juggernauts such as health and safety companies Halmainternational distributor Bunzl and defense giant BAE systems. From the FTSE250there is a meat supplier Cranswick. All score very well on the things I am looking for.

Also included in the middle index are high-tech instruments, test equipment and software suppliers Spectris (LSE: SXS). This may seem strange: the stock price is down more than 30% in 2024. What does it yield?

Well, at least some of this decline has been driven by weaker demand in China and declining sales of electric vehicles (EVs), which has driven down profits. While stimulus measures have been announced to revive the country’s slowing economy, it is too early to say how effective they will be. This could mean that Spectris will remain in the doldrums for a while.

But again, this headwind seems temporary to me. Furthermore, the company is in great shape when it comes to returning more money to shareholders every year. According to analysts, the company will earn a return of 3.2% in 2024. This payout also seems like it could easily be covered by profits.

Investing in the rear view mirror

Of course, hindsight is a wonderful thing. There’s no guarantee that the dividend demons I mentioned will continue to drain cash in the future.

That’s why I still check that the money I’ve invested isn’t overly focused on a particular sector. Otherwise, I could experience the nightmare of multiple holding companies canceling or cutting their dividends. That’s not exactly ideal, even though I plan to stick with it for the long term.

That said, I can see myself buying these stocks in the future as investing for dividends becomes my core strategy.