Dividend stocks are the core of a great stock portfolio. They provide the safety and passive income that balance out growth stocks, protecting your funds when the market falters.
As such, they're naturally stocks that you want to be able to hold onto forever. Solid, reliable stocks should withstand the tests of time. That's legendary investor Warren Buffett's forte, and I'm going to recommend two of his favorite stocks: American Express (AXP 1.39%) and Bank of America (BAC 2.87%).
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1. American Express
American Express is the poster child for durability. It's one of the oldest companies in the country, founded in 1850. It just celebrated 175 years of operation, and it's as strong as ever.
One of the company's most impressive features is its ability to change over time to meet evolving trends in finance, and that's how it continues to grow and stay relevant. Most recently, it has embraced financial technology, gearing itself toward a wave of younger consumers. It also just did a card refresh to enhance its rewards program with new perks that fit today's lifestyle.
NYSE: AXP
Key Data Points
The results demonstrate that the strategy is working. Revenue keeps rising, up 10% year over year in the 2025 fourth quarter and for the full year. Gen Z spending increased 38% from a year earlier in the fourth quarter, even though it only accounted for 6% of total revenue. That's great news for the company's future.
One of the company's unique features as a credit card giant is its operating model, which drives loyalty and generates recurring revenue. Card fees rose by a double-digit percentage in the fourth quarter for the 30th straight quarter and accounted for 13.6% of total revenue.
Although American Express's dividend yield is only about 1%, the company has been raising it, and shareholders benefit from passive income while the stock continues to beat the market.
2. Bank of America
Bank of America is the second-largest bank in the U.S., and it continues to find new ways to expand and offer value to customers and shareholders.
It had a fantastic 2025, with a 13% increase in earnings per share; 14.2% return on tangible common equity (ROTCE), up 1.28 percentage points; and a 3% increase in deposits. In consumer banking, it added 680,000 new accounts and 3.8 million credit cards, and it opened 21,000 net new relationships in global wealth and investment management. As a bank, it benefits from falling interest rates, which stimulate economic activity.
NYSE: BAC
Key Data Points
Like most companies today, Bank of America is leaning into artificial intelligence (AI) to become more efficient. It has had a digital chatbot for years, and it's using AI for coding and prompting. That's helping it keep headcount little changed, and it's expecting to reduce it this year.
Bank of America has been paying a dividend for more than 20 years, and the dividend yields 2.1% at the current price. It's an excellent choice for a stable market leader with a growing dividend.
