When selecting dividend stocks for long-term, sustainable passive income, investors must carefully evaluate several key factors to ensure consistent returns and financial stability. Start by analyzing the company’s **dividend yield**, which indicates the annual dividend payment relative to the stock price. However, avoid chasing excessively high yields, as they may signal financial instability or unsustainable payouts. Instead, focus on companies with a **history of consistent dividend growth**, as this demonstrates financial health and a commitment to rewarding shareholders. Look for **dividend aristocrats**—companies that have increased their dividends for at least 25 consecutive years—as they often provide reliable income streams. Another critical factor is the **payout ratio**, which measures the percentage of earnings paid out as dividends. A lower payout ratio (ideally below 60%) suggests the company retains enough earnings to reinvest in growth or weather economic downturns, reducing the risk of dividend cuts. Additionally, assess the company’s **cash flow and balance sheet strength**. Companies with strong free cash flow and manageable debt levels are better positioned to maintain and grow dividends over time. Industry stability is also crucial. Sectors like utilities, consumer staples, and healthcare tend to perform well during economic downturns, making them ideal for dividend-focused portfolios. However, diversification across multiple sectors can mitigate risks and enhance long-term returns. Investors should also consider **dividend reinvestment plans (DRIPs)**, which allow reinvesting dividends to purchase additional shares, compounding returns over time. Tax implications are another consideration. Qualified dividends are taxed at lower rates than ordinary income, making them more attractive for long-term investors. Finally, stay informed about macroeconomic trends, such as interest rate changes, which can impact dividend-paying stocks. By combining these factors—dividend yield, payout ratio, financial health, industry stability, and tax efficiency—investors can build a robust portfolio of dividend stocks designed to generate sustainable passive income for years to come.