The Best Dividend Stocks to Buy and Hold Forever

Wall Street often moves like a herd, with a big theme leading investors to rush in a single direction. Currently, one of the primary concerns is that consumers are becoming increasingly aware of costs, which is leading to a shift from higher-priced items to lower-cost ones.

That has consumer staples stocks, some of which are seeing this dynamic, to sell off sectorwide. If you are a contrarian, now is a good time to look for buy-and-hold stocks in this historically reliable sector. A good trio to start with, if your preferred holding period is "forever," is Hormel (NYSE: HRL), Procter & Gamble (NYSE: PG), and Coca-Cola (NYSE: KO). Here's what you need to know.

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Hormel is deeply out of favor

Full disclosure, I recently sold Hormel to capture losses I had so I could offset gains elsewhere in my portfolio. I am actively counting the days until I'm outside the wash sale rule so I can buy Hormel back. That said, Hormel is not performing optimally right now, so there is a reason why the stock is in the doldrums. But there's an important nuance to the story.

Even well-run businesses experience difficult times. In late November 2025, Hormel announced its annual dividend streak was entering its sixth decade. That's a clear sign that management and the board of directors think the future remains bright despite today's tough operating environment.

Indeed, despite the headwinds, Hormel still owns a large collection of category-leading food brands. The board also recently brought in a new CEO to help get the business back on track. Given the dividend track record, it seems highly likely that Hormel will turn its business around before too long. However, if you buy the stock today, you'll get it while it is trading with a historically high 4.9% dividend yield, and key valuation metrics like price-to-sales and price-to-book value are below their five-year averages.

Procter & Gamble is doing just fine

One of the criticisms of Hormel is that its earnings have been weak, declining from $1.47 in fiscal 2024 to $0.87 in fiscal 2025. That's a real negative, even though it seems likely that the company will find its way back to growth again. Procter & Gamble, on the other hand, saw earnings increase 4% in fiscal 2025 and 3% in the first quarter of fiscal 2026. The consumer staples giant is doing just fine as a business, reliably selling its products even amid consumer spending worries.

The truth is, you probably have a favorite toothpaste, deodorant, and toilet paper. Like most consumers, you won't switch unless absolutely necessary. That brand loyalty works in favor of Procter & Gamble even though Wall Street has pushed the price lower, along with the broader consumer staples sector. If you don't mind paying a fair price for a good business, you'll want to jump on Procter & Gamble today.

For starters, the 2.9% dividend yield is well above the 1.1% yield of the market and a touch higher than the 2.7% yield of the average consumer staples stock. But Procter & Gamble's valuation is also quite compelling, with the stock's price-to-sales, price-to-earnings, and price-to-book value ratios all below their five-year averages. The stock isn't as beaten down as Hormel, but it is well worth buying this industry-leading consumer staples company and holding it forever. And for reference, like Hormel, Procter & Gamble is a Dividend King (its streak is 69 years strong).

Coca-Cola is doing relatively well

If I didn't already own direct competitor PepsiCo (NASDAQ: PEP), I would probably buy Coca-Cola today. It has an attractive 2.9% yield. It is a Dividend King with 63 annual dividend increases behind it. And the stock's price-to-earnings and price-to-book value ratios are below their five-year averages. The price-to-sales ratio is roughly in line with its five-year average, so all in all the stock looks fairly priced to a little cheap.

That said, the real attraction is Coca-Cola's business, which is performing fairly well right now. The company's organic sales jumped 6% in the third quarter of 2025, an improvement over the 5% growth in the second quarter. By comparison, PepsiCo, the stock I own, saw organic sales rise 1.3% in the third quarter of 2025, down from 2.1% in the second quarter. There's a reason why PepsiCo's yield is 3.8%.

If you prefer to err on the side of caution, Coca-Cola is the better choice when compared to PepsiCo, despite Coca-Cola's lower yield. That's the kind of risk/reward trade-off you often have to make when investing. I wouldn't advise investors to avoid PepsiCo, but if you are a dividend investor who places a high value on income safety, Coca-Cola's strong performance in the face of a challenging market makes it difficult to ignore this beverage giant.

All three are worth holding for the long term

You may not like all three of these consumer staples makers, but each one has a certain appeal. Hormel is the riskiest of the three, but given enough time, it should be able to get back on track. Procter & Gamble and Coca-Cola both have fairly similar stories, both of which should appeal to even the most risk-averse investors today.

Reuben Gregg Brewer has positions in PepsiCo and Procter & Gamble. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.