Profitable and dependable: These are two words that dividend investors want to hear. When you buy and hold dividend stocks, it means that you invest in them and keep them in your portfolio. You then benefit from the dividends year in and year out.
Because they're solid companies, the companies we've chosen to highlight below have a high likelihood of continuing to pay out dividends, which will likely increase on a yearly and even monthly basis.
If you're ready to sink some money into dividend stocks and keep them in your portfolio — and even pass them onto your heirs — here are the dividend stocks to hold forever (and how to woo them into your portfolio as well).
Why Hold Dividend Stocks Forever?
First of all, what exactly is the benefit to buy-and-hold investing?
Buy-and-hold investing means that instead of stock trading, you hold onto company stocks and anticipate that the price will rise over time. You may reduce transaction fees and short-term capital gains taxes. Ultimately, one of the main benefits is that it's usually more cost-effective to hold onto stocks for the long term because unlike regular buying and selling, which costs money, you'll pay fewer fees when you hold onto your investments for a long time.
Choosing the right dividend stocks by taking a look at a company’s fundamentals, balance sheet, the strength of the company’s management and its position in that industry means you can experience great success with buy-and-hold investing.
Dividend stocks typically weather adversity well, which means that in challenges with negative market conditions and fluctuations, dividend stocks usually perform well due to their underlying strength and fundamentals.
How to Hold Onto Dividend Stocks Forever
So, how exactly do you choose and invest the right dividend stocks to hold onto forever? Let's take a quick look at the process before we reveal the list of best buy-and-hold dividend stocks.
Step 1: Start by researching companies.
Start by considering companies you know and love. Why do you (and millions of others) continue to be repeat customers? Once you know of a company you want to own, take a look at its annual report, use analytical tools to check out everything you need to know about it, read the SEC filings, learn more in earnings updates and read any and all news about the company. Uncover everything you can about a particular company before you purchase.
Step 2: Open an account.
One of the easiest ways to set up an account is to go through an online stockbroker. Once you set up your account, you can purchase stocks through your broker's website fairly quickly. You can also purchase through a full-service stockbroker, your financial advisor or purchase stock directly from the company itself.
Step 3: Select the number of shares you want to buy and purchase.
A share of stock is one small portion of ownership in a company, so the more shares you buy, the more of the company you purchase. Navigate and enter the ticker symbol of the company you want to purchase and buy the number of shares you want using a market order, limit order, stop-loss order or stop-limit order.
Step 4: Hold onto your shares.
Finally, clutch your shares and hold on for the long ride ahead. That doesn't mean you never check how your stock is performing, it just means that you famously shouldn't "hold your stock for 10 minutes" if you never intended to hold it for 10 years, another well-known aphorism from Buffett.
Dividend Stocks to Hold Forever
We've selected some dividend stocks that you may want to plop in your portfolio and hold until the end of time. Don't forget to check out cheap dividend stocks and high-yield dividend stocks.
AbbVie, headquartered in North Chicago, develops, researches and sells biopharmaceutical products. The company offers medicines for a wide variety of diseases, including the household-name HUMIRA to CREON (a pancreatic enzyme therapy for exocrine pancreatic insufficiency). The company offers treatment for rheumatology, gastroenterology, dermatology, oncology, virology, neurological disorders, metabolic diseases and other health conditions.
Shares of AbbVie are up about 13% in 2022, beating the benchmark S&P 500, which has gone down about 20% over the same period. With an annual dividend of 3.71% and a $5.64 annual dividend. Its dividend can be traced back over 50 years.
Abbott Laboratories, headquartered in North Chicago, Illinois, develops, manufactures and sells health care products to treat pancreatic exocrine insufficiency, irritable bowel syndrome, intrahepatic cholestasis, dyslipidemia, hypertension, hypothyroidism and more.
It also develops and manufactures systems for extraction, purification and preparation of DNA and RNA, cartridges for testing blood, testing for HIV, SARS-CoV-2, influenza A and B, RSV, and strep A and more.
The company also manufactures pediatric and adult nutritional products and heart devices for the treatment of cardiovascular diseases as well as diabetes care products.
It has a dividend yield of 1.74% and an annual dividend of $1.88 per share as well as a dividend track record of 50 years. The company has outperformed the market over the past 5 years by over 7% on an annualized basis and annual returns over 17%.
Eli Lilly and Company (NYSE: LLY), headquartered in Indianapolis, Indiana, develops a wide range of medicines and current treatments, such as ADCIRCA, AMYViD, bamlanivimab and etesevimab, baricitinib, BAQSIMI, BASAGLAR, Glucagon Glyxambi, Humalog, Humulin, Insulin Lispro, Jardiance, Jentadueto, Lyumjev, Synjardy, Tradjenta, Trijardy, Trulicity, CYRAMZA, ERBITUX, ALIMTA, Gemzar, Portrazza, Retevmo, Verzenio, Zyprexa Relprevv and more.
With its stock up by an impressive 17% since the beginning of the year and continued solid financial results, Eli Lilly and Company also has a dividend yield of 1.22% and an annual dividend of $3.92 per share.
Pfizer Inc., a global pharmaceutical and biopharmaceutical giant, develops and manufactures medicines and vaccines.
Vaccine sales have boosted Pfizer's results — adjusted EPS rose 129% compared to the year-ago quarter and expanded revenue increased 134% year over year (YOY), outpacing analyst predictions. The COVID-19 vaccine has almost doubled Pfizer's business.
With a 3.10% dividend yield and an annual dividend of $1.60 per share, Pfizer Inc. is a solid choice for a forever buy-and-hold.
Procter & Gamble Co., headquartered in Cincinnati, Ohio, delivers consumer goods in the following areas: beauty, grooming, health care, fabric and home care and baby, feminine and family care.
Procter & Gamble's net sales continue to grow and its annual report also reported high-flying organic sales, core earnings and adjusted free cash flow. In fiscal year 2021, it showed tremendous growth in 10 product categories.
Procter & Gamble has paid a growing dividend and announced over 65 years, with a dividend yield of 2.53% and an annual dividend of $3.65 per share.
The Coca-Cola Company, famously headquartered in Atlanta, manufactures and sells nonalcoholic beverages, including soft drinks, flavored water and sports drinks, juice, dairy, tea, coffee and energy drinks. Brands include Coca-Cola, Diet Coke/Coca-Cola Light, Fanta, Fresca, Schweppes, Sprite, vitaminwater, Powerade, Minute Maid, Simply, Gold Peak brands and more.
The company has paid a dividend for 60 consecutive years and dividend investors will also likely see continued increases in its share price, with a 2.77% dividend yield and an annual dividend of $1.76 per share.
Headquartered in Dallas, AT&T Inc. manufactures and sells telecommunications and data worldwide, including wireless voice and data communications services, handsets, wireless data cards, wireless computing devices, hands-free devices and more. It also sells data, voice, security and cloud solutions, managed and professional services, customer premises equipment and broadband fiber under the AT&T, Cricket, AT&T PREPAID and AT&T Fiber brands.
AT&T consistently offers a solid track record, a $1.11 dividend per share and a dividend yield of 5.27%.
Cardinal Health Inc., headquartered in Dublin, Ohio, distributes pharmaceuticals and medical and laboratory products and as a provider of performance and data solutions for health care facilities.
Cardinal Health Inc. continually grows its revenue and enterprise cost savings targets as well as focuses on paying down long-term debt. Its dividend yield is currently 3.74% and its annual dividend per share is $1.96, with a dividend increase track record of 36 years.
Dominion Energy Inc., headquartered in Richmond, Virginia, provides electricity and natural gas to customers. The company runs a regulated interstate natural gas transmission pipeline and underground storage system.
Dominion Energy's dividend yield is currently 3.32% and the company offers a $2.67 per share dividend as well.
Johnson & Johnson, based in Brunswick, New Jersey, researches, develops, manufactures various brand-name products, including: JOHNSON'S, AVEENO, LISTERINE, CLEAN & CLEAR, NEUTROGENA, SUDAFED, MOTRIN IB, PEPCID and NEOSPORIN. The company also creates products for immunology, infectious disease treatment, neuroscience, oncology and more.
Johnson & Johnson will spin off its customer segment into a new, publicly traded entity in order to change up its business strategies due to pharmaceuticals and medical devices generating the most revenue.
Its annual dividend is $2.67 per share and its dividend yield is 3.32%.
Hold on Forever
Talk about a commitment. Some people don't even hold onto their marriages forever. However, it's worth considering the benefits of buy and hold versus trading. Buy and hold investors typically outperform active traders and can defer short-term capital gains taxes. What's not to like?
Learn more: Dividend Stocks for Retirement: Can You Live Off Dividend Stocks?
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