7 Dividend Stocks to Buy and Hold Forever and Ever

Recently, investors searching for dividend stocks to buy have seen more opportunity.

Some looking for income over a longer term horizon have flooded into the bond market. Yields there are rising, and some, like treasury bonds, are nearly risk free. That has taken the focus off of more traditional income sources, including dividend stocks. 

That shift from dividend stocks to buy is reason enough to refocus on them as a buy-and-hold income source. Even though bond yields are nearing 5% they simply lack the price appreciation potential that equities possess.

Thus, stocks yielding an additional 3-4% or more through dividends are going to remain attractive. It’s a simple but powerful truth that makes the dividend stocks to buy here sound choices for the long-term investor who prefers income and upside potential. 

Kellanova (K)

Kellanova (NYSE:K) is a stock that benefits from the high profitability of snack foods.

The firm is a spinoff of Kellogg’s, renamed WK Kellogg (NYSE:KLG) following the rebrand. Kellanova keeps the high-growth, high-margin snack brands including Eggo and Pringles while WK Kellogg will depend on low-growth cereal brands including Corn Flakes, Mini Wheats, and Raisin Bran. 

Kellanova is walking in the well-worn steps of brands that followed a similar path. Mondelez International (NYSE:MDLZ) is the best example. The snack business famous for Ritz, Triscuits, and other brands was spun out of Kraft and has done well throughout the inflationary era as consumers continue to spend on snacking. 

Kellanova’s early success has been clear. Sales and earnings growth has been strong and it’s clear that profitability is there. A quick glance at earnings shows that EPS fell by 13.2% year-to-date. However, that is attributable to costs of the separation. EPS jumped by 8% in Q2 following the separation. 

K is one of th better dividend stocks to buy out there with a 4.85% yield, which is quite high especially considering its overall growth. 

AbbVie (ABBV)

AbbVie (NYSE:ABBV) has overcome a significant hurdle that often stifles pharmaceutical firms and gone from a dicey proposition to one of the better dividend stocks to buy in the space. 

Humira’s decline will not be the death of AbbVie by any means. Instead, the firm has done what so many other drug makers couldn’t: It is replacing the waning revenues of a waning blockbuster with fresh product sales. 

In the midst of all of that, AbbVie continues to reward shareholders with steady dividend income, providing uninterrupted growth since 1972.

To be sure, AbbVie isn’t out of the woods yet. Second-quarter revenues fell by 5% moving to $13.87 billion. AbbVie’s Immunology portfolio, anchored by Humira, fell by 5.5% to $6.8 billion. Humira accounted for $4.01 billion in revenues, down 25%, so its contribution and importance can’t be overstated.

However, Skyrizi and Rinvoq, both part of the immunology portfolio, are rapidly taking up the slack growing by 50% and 55%, respectively. 

That has allowed AbbVie to increase its earnings outlook and should do a lot to allay greater fear moving forward. 

Realty Income (O)

Realty Income (NYSE:O) just released its 640th consecutive monthly dividend on Oct. 10. That dividend has grown continuously since 1999 and yields more than 6% at present. 

Consider also that O shares are expected to increase by roughly $15 beyond their current $50 price and it becomes easy to understand why it is one of the perenial dividend stocks to buy.

Realty Income is a REIT which could raise some eyebrows and cause concern. Commercial real estate is highly risky right now and Realty Income leases commercial sites. 

However, it leases a lot of space to convenience store operators and pharmacies which are relatively insulated. It isn’t in office space and other rapidly shifting sectors. 

The company is a dividend aristocrat, meaning it has paid a growing dividend for 25 consecutive years. That’s important, but so too is the fact that Realty Income engages in long-term leasing agreements. 

Longer duration means the firm can better forecast financial expectations for the long term and provides stability in general. 

Devon Energy (DVN)

Devon Energy (NYSE:DVN) is arguably the riskiest investment on this list of dividend stocks. It is an American E&P oil firm with a beta of 2.33. 

It’s clearly volatile but that volatility can lead to big rewards. A big part of that reward potential is provided through Devon Energy’s base-plus-variable dividend. I’ll get to that in a minute but let’s first look at the catalysts for the stock price to appreciate. 

Energy prices are rising again. Rising Middle East tensions as Israel and Palestine wage war are escalating volatility in the region. 

That threatens oil supplies and conversely provides an opportunity for Devon Energy. 2022 was a strong year for energy stocks which led all sectors. 2023 came in like a lamb but may head out like a lion. 

That’s appealing for investors who like Devon Energy because it provides a base-plus-variable dividend that benefits when factors swing in favor of U.S. production. 

The impetus to produce more oil domestically is becoming even clearer and that means DVN shares are in line to provide strong returns in the near term.  

NextEra Energy (NEE)

NextEra Energy (NYSE:NEE) is a utilities stock which has been a detriment to its shares over the last few weeks. 

The bond market has stolen the thunder from utilities firms as yields increased to highs not seen since 2007. Utilities are generally attractive for their low-risk income in the form of modest yield dividends. 

Reliability and nearly risk free 2% returns were enough for investors. 5% yields from risk free treasury bonds invalidated their appeal. 

One, bond yields are volatile at the moment. The markets are in flux and that has sent NEE up as I write this. 

However, NextEra Energy is more than a simple consideration between utilities stocks versus bond yields. It is part utilities firm and part renewables firm. 

Both segments of its business, Florida Power & Light and NextEra Energy Resources are the largest global entities within their respective niches. NextEra Energy’s growth has been strong and its dividend yields an additional 3.4%.

Pfizer (PFE)

Pfizer’s (NYSE:PFE) story is fairly analogous to that of AbbVie: Its stock suddenly looks weaker because of a rapidly waning blockbuster. In Pfizer’s case, that declining giant is Comirnaty, the wildly successful Covid-19 vaccine. 

Investors should be careful not to discount Pfizer based on 2021 and 2022 results. 

Comirnaty’s success doubled Pfizer’s revenues from $41 billion in 2020 to $81 billion in 2021. The firm then eclipsed $100 billion for the first time ever in 2022. In 2023, it’s expected that Pfizer will hit $66 billion in revenues. 

Don’t look at this as a decline. Look at it for what it is: An unpredictable windfall that will propel Pfizer to higher highs. If Pfizer were to have grown from $41 billion to $66 billion between 2020 and 2023 it would be a smash success. 

Look at it that way because it’s flush with cash from the pandemic victory and reinvesting that money to revitalize its pipeline. That cash is also being directed to shareholders who receive a 5% dividend because investors at large have been blinded by Comirnaty’s decline. 

Microsoft (MSFT)

Microsoft (NASDAQ:MSFT) is not usually lumped in with dividend stocks. I’d venture to guess that many investors aren’t even aware that the tech giant pays a dividend. It does though, and that dividend’s yield is approaching 1% after having grown by more than 10% over the last 5 years. 

That’s a bonus for investors who like Microsoft for its growth potential. In 2023, that’s been on display as Microsoft emerged as a leader in the generative AI boom through its massive investment in OpenAI and ChatGPT. 

The returns on that investment will unfold for many years to come but it’s fair to anticipate that Microsoft will see strong returns. 

The company prevailed over antitrust concerns and is now allowed to acquire Activision (NASDAQ:ATVI). That will boost its video game revenues by an expected 50% to $24 billion. 

The company is probably going to have to pay a good chunk of that to the IRS who is coming after Microsoft for back taxes. Based on precedents like Coca-Cola (NYSE:KO), the IRS is likely to prevail meaning Microsoft will likely owe more than $30 billion. 

However, Coca-Cola continues to appeal that 2020 decision meaning Microsoft won’t face a bill for quite some time if at all assuming it loses at all. 

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.