Buying and holding stocks with incredible long-term potential is the goal of a lot of investors. After all, who doesn't want to achieve monster returns?
But market participants also have other objectives. Some investors simply want the businesses that they own to cut them a check every quarter. Generating income is the priority in this case.
There are some very high-quality, industry-leading companies to zero in on. Here are the two best dividend stocks to buy now and hold forever.
Image source: The Motley Fool.
This beverage giant has a fantastic 64-year streak going
The first dividend stock investors can confidently buy and hold forever is Coca-Cola (KO +0.56%). The leader in soft drinks has a phenomenal track record. It has raised its dividend payout for 64 straight years, after the board of directors approved a 4% increase last month. The current yield is 2.72%.
Coca-Cola's longevity supports the case for its relevance well into the future. This is a stable business, with predictable demand that doesn't fluctuate with changing economic conditions. Consumers will buy Coca-Cola beverages regardless of the macro backdrop.
The company's brand is its most important asset, which drives customer loyalty and pricing power. Anyone can start a new drink business. It would be almost impossible to scale up and compete effectively with Coca-Cola, however, because it has unmatched distribution and marketing capabilities.
There is no risk that the dividend will go away. In the past decade, the business has posted an average operating margin of 27.5%. And it generates robust free cash flow.
"We have an unwavering commitment to reinvest in our business and grow our dividend," CFO John Murphy said on the fourth quarter 2025 earnings call.
NYSE: KO
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The world's top retailer has raised its payout for 53 straight years
Next is Walmart (WMT +0.94%), the world's biggest retailer. While not as long as Coca-Cola's track record, this business has increased its dividend for an impressive 53 consecutive years. On Feb. 19, its board approved a 5% payout increase. The dividend yield stands at 0.78%.
Walmart's focus on offering a massive number of goods at low prices supports its performance in both good and bad economic times. The company reported positive same-store sales of 4.6% in the U.S. in the fourth quarter of fiscal 2026 (ended Jan. 31), at a time when low-income households are feeling financial pressure.
"For households earning below $50,000, we continue to see that wallets are stretched, and, in some cases, people are managing spending paycheck to paycheck," CEO John R. Furner said on the Q4 2026 earnings call. "Even these households are emphasizing convenience nearly as much as price." That reality plays to Walmart's benefit.
Amazon gets a lot of attention for disrupting the retail sector, bringing online shopping to the masses. But it's not the threat to Walmart's dominance that it once was. Walmart has adapted, and its e-commerce sales were up 24% in Q4.
NASDAQ: WMT
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Investors should set the right expectations
Both Coca-Cola and Walmart are durable businesses. They have stood the test of time. They face stable and predictable demand. And they're consistently profitable. Investors can view these blue chip stocks as solid foundations, increasing the safety positions of their portfolios.
Still, don't expect these companies to produce returns that outperform the market. In particular, Coca-Cola is already ubiquitous, and it's a very mature business. In Walmart's case, its valuation is in nosebleed territory, as the price-to-earnings ratio of 46.8 is 223% more expensive than a decade ago. These are clear reasons the capital gains won't be impressive.
These stocks still make sense for income investors. It's hard to beat the track records of Coca-Cola and Walmart when it comes to raising dividend payouts.
