For investors seeking long-term stability and dividends, three companies within the S&P 500 stand out as excellent buys. These firms offer attractive yields and solid growth prospects, making them ideal for those who prefer a set-it-and-forget-it approach to investing. PepsiCo, Merck, and The AES Corporation each present unique advantages that make them compelling choices for holding indefinitely. Despite recent market volatility, these stocks are positioned to deliver consistent returns over time.

PepsiCo has emerged as a top contender in the consumer goods sector, offering not only a higher dividend yield but also a more diversified business model compared to its rivals. With a forward-looking yield of 3.5%, PepsiCo stands out from Coca-Cola, which offers a slightly lower yield of 2.9%. While both companies have impressive track records of increasing dividends annually, PepsiCo's broader product range, including popular snack brands like Fritos and Lay’s, gives it an edge in terms of operational flexibility and control. This diversification allows PepsiCo to adapt quickly to market changes, making it a safer bet for long-term investors. Additionally, the stock is currently trading at a 20% discount from its 2023 high, presenting an attractive entry point.

Merck, on the other hand, represents a strong play in the pharmaceutical industry. Despite facing challenges such as slowing sales of its blockbuster drug Keytruda and competitive pressures, Merck remains a robust investment. The company’s forward-looking dividend yield of 3.5% is now more appealing due to its recent pullback. What sets Merck apart is its proven ability to innovate and replace aging products with new ones. For instance, Keytruda, which contributes significantly to revenue, was introduced after acquiring Organon in 2006. Even as patent protections expire, Merck continues to develop promising drugs, including therapies for pulmonary arterial hypertension and obesity. CEO Robert Davis has highlighted that the company has 20 potential blockbuster drugs in development, with the potential to generate $50 billion in annual revenue. This pipeline ensures that Merck can maintain its legacy of innovation and profitability.

The AES Corporation, though less well-known, offers one of the most attractive dividend yields among utility stocks, currently standing at 6.4%. AES is undergoing a significant transformation, shifting its focus from fossil fuels to renewable energy sources. This transition involves selling off some assets and investing heavily in new power production facilities, particularly in solar and battery storage. While this shift comes with financial challenges, it positions AES to capitalize on the growing demand for clean energy. The company’s strategy aligns with global trends toward sustainability and renewable mandates. Moreover, AES is expanding its capacity to meet the rising electricity needs driven by data centers. Management projects steady sales growth of 5% to 7% and earnings per share growth of 7% to 9% through 2027, making AES a solid choice for long-term investors looking for both income and growth.

In conclusion, PepsiCo, Merck, and AES Corporation each offer unique strengths that make them suitable for long-term holdings. PepsiCo’s diversified business model and higher dividend yield, Merck’s innovative pipeline and robust pharmaceutical presence, and AES’s strategic shift toward renewable energy all contribute to their appeal. For investors willing to look beyond short-term volatility, these stocks provide a compelling opportunity to secure steady returns and dividends over the years ahead.