2 Top Dividend Stocks to Buy and Hold Forever

Dividends can help smooth out market losses during downturns. They can also significantly boost long-term returns through dividend reinvestment. In other words, income-oriented stocks can appeal to a variety of investors: those looking to stabilize their portfolios in anticipation of potential trouble, others seeking long-term growth, and, of course, investors simply seeking to generate passive income.

But even among dividend payers, few are worth sticking with for good. Let's consider two that are: Microsoft (NASDAQ: MSFT) and Abbott Laboratories (NYSE: ABT).

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1. Microsoft

Even with a market cap of almost $4 trillion, Microsoft is arguably one of the best growth stocks. It continues to post terrific financial results. In the first quarter of its fiscal 2026, ended Sept. 30, revenue grew 18% year over year to $77.7 billion. Non-GAAP (adjusted) earnings per share were $4.13, up 23% compared to the year-ago period.

The company's segments saw solid growth across the board, but its work in cloud computing deserves special attention: Azure revenue grew 40% year over year. There's more where that came from; Microsoft noted, once again, that demand for its cloud services continues to exceed supply. It's a great sign that it can't even keep up with the rapidly growing field. The tech giant is still one of the leaders in this area, and should remain so for a while. This could be a tailwind for Microsoft for years to come.

However, there are even more important reasons that Microsoft is a forever stock. The company is incredibly innovative and knows how to pursue high-growth opportunities. It also generates plenty of cash flow to pour into research and development (R&D). Furthermore, Microsoft has a strong economic moat, based on its brand name, switching costs, and deep, long-standing relationships with millions of businesses, all of which are contributing to its success in the cloud.

Some might argue that valuation is an issue, given that shares trade at almost 33.3 times forward earnings, versus the average of 22.3 for communication services stocks. Even so, that will hardly matter in a decade (or two), even if we put aside the fact that Microsoft's strengthening position in one of the more lucrative, high-growth industries has earned it a premium.

Finally, the company is a strong dividend payer, even with a low forward yield of 0.7%. Microsoft has increased its payouts by almost 153% over the past decade and boasts a highly conservative cash payout ratio of 33.6%, which leaves it plenty of room to continue hiking dividends. The stock is a top pick for long-term, growth, and income-seeking investors.

2. Abbott Laboratories

Abbott Laboratories might be less exciting -- it's not a leader in artificial intelligence or the cloud. However, the healthcare leader makes up for it with a steady, reliable business, products that remain in high demand regardless of economic conditions, and consistent revenue and earnings.

Abbott is best known for its work in medical devices, where it has consistently made breakthroughs and boasts many products that are among the market leaders in their niches. That includes the company's FreeStyle Libre franchise, a series of continuous glucose monitoring (CGM) devices that help people with diabetes stay on top of their blood glucose levels.

Though FreeStyle Libre is Abbott's biggest growth driver, other devices, such as the MitraClip for mitral valve regurgitation and the TriClip for tricuspid regurgitation, are also among the top products in their respective categories. Thanks to its ability to innovate, Abbott Laboratories has built a strong brand and deep roots in the highly regulated healthcare sector.

The company's other segments, including pharmaceuticals, diagnostics, and nutrition, provide it with significant diversity and the ability to navigate challenges across individual business lines. That's how Abbott has been successful for a long time. And with plenty of long-term tailwinds -- such as the extremely low percentage of diabetes patients who currently have access to CGM, or the world's aging population -- its long-term prospects look bright.

Finally, Abbott Laboratories is a member of the Dividend Kings, companies which have raised their payouts for at least 50 consecutive years, with its own streak now at 53. Its current yield of 1.9% is above the S&P 500's average of 1.2%, while its payout ratio is still reasonable at 60.4%. Abbott has one of the more secure dividends on the market, given its Dividend King status and solid underlying business, and should reward shareholders with payout increases for a long time.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.