In this article we will be taking a look at the 10 best buy and hold forever dividend stocks. To skip our detailed analysis of dividend investing, you can go directly to see the 5 Best Buy and Hold Forever Dividend Stocks.
Income or dividend investing is a strategy that is reputable for its utility and usefulness. This form of investing has also become more popular in light of bond yields and other fixed-income investments offering relatively low profits, according to a Jefferson Research report published in 2017.
The report offers an insight into the benefits of investing in various dividend stocks, like The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO). Such stocks offer an immediate cash flow to investors until they are sold, and their dividend payments are also subject to increase over the years. As such, they also offer protection in times of inflation and are individually less risky investments. Additionally, these stocks have historically outperformed the market and bonds.
To support the above claims, the report gives insight into some empirical evidence. In 2013, Goldman Sachs White Paper “Why Dividend Growth Matters” showed that the annual return of dividend growers and initiators was 9.6% compared to 7.1% for the S&P 500. Additionally, the volatility of the former was 16.2%, compared to 18% for the latter, representing the reduced risk of dividend stocks. Finally, from 1926 to 2010, it has also been noted that 85% to 90% of the S&P 500’s returns were from dividends alone.
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Our Methodology:
These stocks mentioned in this article are considered good buy and hold forever options because they have records of consistent dividend increases, and positive news surrounding them for future prospects, all of which we have mentioned below. We have also mentioned analyst ratings for the stocks selected, ensuring they have mostly positive ratings. Additionally, the price gains of the stocks listed below, as of mid-March 2022, have also been mentioned where applicable. Finally, the stocks are ranked on the basis of their dividend yields, from the lowest to the highest dividend yield.
Best Buy And Hold Forever Dividend Stocks
10. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 67
Dividend Yield: 2.3%
The Procter & Gamble Company (NYSE:PG) is a giant in the consumer staples industry, being the company behind many big consumer brands, such as Gillette and Pampers. The company has raised its dividend consecutively for the past 65 years, making it a reputable Dividend King.
Deutsche Bank analyst Steve Powers holds a Buy rating on The Procter & Gamble Company (NYSE:PG) as of March 2022.
In the fiscal second quarter of 2022, the company had an EPS of $1.66, beating estimates by $0.01. Its revenue was $20.9 billion, also beating estimates by $617.4 million. The Procter & Gamble Company (NYSE:PG) has also gained 3.8% in the past six months.
The number of hedge funds holding shares in The Procter & Gamble Company (NYSE:PG) in the fourth quarter of 2021 was 67, with a total stake value of $6.6 billion. In comparison, 69 hedge funds held stakes in the company in the previous quarter, with a total stake value of $6.4 billion.
The Procter & Gamble Company (NYSE:PG), like Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO), is among the most reliable dividend stocks to buy in 2022 because of its history of dividend increases.
9. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Dividend Yield: 2.5%
Johnson & Johnson (NYSE:JNJ) is a healthcare company that has been operational for over a century. It offers some of the most popular medicinal products such as Tylenol and Band-Aids, alongside more complex drugs and medical devices. It is one of the best buy and hold forever dividend stocks to invest in, as showcased by the large number of hedge funds holding stakes in the company, and the stock’s dividend history showing dividend increases for 59 years in a row.
Lee Hambright, an analyst at Bernstein, holds an Outperform rating on Johnson & Johnson (NYSE:JNJ) shares as of this March.
Johnson & Johnson (NYSE:JNJ) had an EPS of $2.1, beating estimates by $0.01, in the fourth quarter of 2021. Its revenue was $24.8 billion, beating the previous quarter’s revenue of $23.3 billion. The stock has also gained 4.6% in the past six months and 0.8% year to date.
Out of 924 hedge funds, 83 hedge funds were long Johnson & Johnson (NYSE:JNJ) in the fourth quarter, with a total stake value of $7.4 billion. The largest stakeholder in the company was Fundsmith LLP, holding 7,219,198 shares worth over $1.2 billion.
8. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 57
Dividend Yield: 2.7%
Cisco Systems, Inc. (NASDAQ:CSCO) is a leading company in enterprise computing, and an icon in Silicon Valley. The company has long established itself as one of the dominating forces in the tech sector. Having raised its dividend consecutively for the past decade, it is among the best buy and hold forever dividend stocks to invest in this year.
Wells Fargo analyst Aaron Rakers holds an Equal Weight rating on Cisco Systems, Inc. (NASDAQ:CSCO) shares as of this March.
This February, Cisco Systems, Inc. (NASDAQ:CSCO) announced a considerable dividend increase of 3%, alongside an additional $15 billion share buyback program. The increased dividend of $0.38 per share will be payable to shareholders on April 27. The company’s CFO, Scott Herren, commented that the dividend increase and share buyback program demonstrate Cisco Systems, Inc.’s (NASDAQ:CSCO) commitment to returning excess capital to its shareholders.
Our fourth-quarter hedge fund data shows 57 hedge funds long Cisco Systems, Inc. (NASDAQ:CSCO) in that quarter, with a total stake value of $3.4 billion.
7. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 70
Dividend Yield: 2.9%
The Coca-Cola Company (NYSE:KO) offers a range of non-alcoholic beverages to consumers across the globe and has recently included juices, teas, and hydration products such as PowerAde and Smartwater to its long list of manufactured products. The company has raised its dividend for the past 59 years as well.
This February, Evercore ISI analyst Robert Ottenstein reiterated his Outperform rating on shares of The Coca-Cola Company (NYSE:KO).
In the same month, The Coca-Cola Company (NYSE:KO) increased its quarterly dividend by a whopping 5%, bringing it up to $0.44 per share. Additionally, the company announced that it expects to resume share repurchases this year, with net repurchases of about $500 million for 2022. Such developments make it an attractive dividend stock with lucrative future prospects.
In the fourth quarter of 2021, 70 hedge funds held stakes in The Coca-Cola Company (NYSE:KO), worth about $28.6 billion. Of these hedge funds, Warren Buffett’s Berkshire Hathaway was the largest stakeholder in the company. The fund held 400,000,000 shares in the company, worth over $23.7 billion.
6. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 107
Dividend Yield: 2.9%
JPMorgan Chase & Co. (NYSE:JPM) is a giant in the financial sector, offering consumer and small-business banking and financial services and products. The company also offers wealth management services and other high-end services for corporate clients and other institutions. The company has raised its dividend for the past nine years in a row, making it one of the most reliable buy and hold forever dividend stocks one can buy.
UBS analyst Erika Najarian holds a Buy rating on JPMorgan Chase & Co. (NYSE:JPM) shares as of this January.
The company’s earnings history shows an EPS of $3.3, beating estimates by $0.3, and a revenue of $29.3 billion, up 0.11% year over year.
JPMorgan Chase & Co. (NYSE:JPM) had 107 hedge funds holding stakes in it in the fourth quarter. Their total stake value was $6.6 billion. Comparatively, in the previous quarter, 101 hedge funds were long the stock, with a total stake value of $5.6 billion.
Miller Value Partners, an investment management firm, mentioned JPMorgan Chase & Co. (NYSE:JPM) in its fourth-quarter 2021 investor letter. Here’s what they said:
“I remember writing about the attractiveness of JP Morgan (JPM) right before it lost about a third of its value in the third quarter of 2011 (which didn’t please some of my colleagues!). I believed JPM was a high-quality bank whose prospects were undervalued due to the overhang on the space. It made money every year through the financial crisis.
In the decade-plus since then, JPM has beaten the market nicely (+417% versus SPX +345%) despite significant headwinds for banks (S&P Financial Sector +286%) and value stocks. Low market expectations are a key ingredient to attractive long-term returns!
An earthquake after-shock metaphor helps to explain the situation. Earthquakes relieve tension in physical systems, but aftershocks are common. These aftershocks aren’t as serious as the original event because stresses have been relieved. The financial crisis alleviated tensions in the financial system as weaker players either perished or were shored up with capital. Lessons learned impacted behavior (lower risk-taking behavior and higher propensity for monetary authorities to intervene supportively), which reduced future risk.
Those realities didn’t matter in the short term, but they sure did in the long term.”
JPMorgan Chase & Co. (NYSE:JPM) is among the more popular dividend stocks hedge funds are looking at this year, like The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO).
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