3 Dividend Stocks to Buy and Hold Forever

Dividend investing will never go out of style, and for good reason. Buying shares of companies that pay and consistently raise their dividends is a great way to earn long-term returns, as it allows investors to put the magic of compounding to work through dividend reinvestment. Of course, dividend stocks come in all shapes and sizes, and some of them aren't worth the trouble for long-term investors. Let's consider three that are worth investing in: Coca-Cola (NYSE:KO), Microsoft (NASDAQ:MSFT), and Visa (NYSE:V).

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1. Coca-Cola

Coca-Cola boasts one of the most popular brands in the world. The company has a large beverage portfolio across multiple categories and generates consistent revenue and earnings. Coca-Cola has been doing it for a while, and over the long run, it has avoided becoming an irrelevant company by keeping up with changing consumer tastes and preferences.

Coca-Cola has introduced new products, innovative twists on old products, and acquired new brands. These efforts have allowed it to remain one of the top players in its industry, and there is more to come. Coca-Cola estimates that it accounts for 2.2 billion of the 65 billion daily beverage servings worldwide.

Increased sales volume and market share gains could help the company grow its revenue and earnings, and we have seen the consumer staples giant pull that off this year. In the second quarter, the company grew its share of the non-alcoholic ready-to-drink beverage market. That's just one quarter, but Coca-Cola appears well-positioned to maintain consistent revenue and earnings growth over the long run. Finally, the company has a fantastic dividend track record.

Coca-Cola is a Dividend King. These are companies with 50 or more consecutive annual dividend increases. Coca-Cola's streak is at 64, and it seems unlikely to end soon, making the stock a great pick for long-term income seekers.

2. Microsoft

Microsoft has rebounded over the past few months, after hitting a brand new 52-week low in June. Some investors worry that artificial intelligence (AI) will replace the company's services, even as it spends fortunes on the technology. But Microsoft's latest quarterly update showed signs that the company is adapting to the new AI world order.

The tech leader has integrated AI across its products and services, and its customers are buying it. AI is helping Microsoft's revenue and earnings grow at a good clip. That's particularly true for the company's cloud business, which is firing on all cylinders.

This highlights something important about Microsoft. The company has faced multiple major technological revolutions that threatened its business over its long and storied history, and it has come out on top every single time. My view is that the company will do the same this time around. Microsoft could capitalize on the AI and cloud industry's growth over the long term, while using its massive pile of cash to tap into new growth opportunities.

Finally, though it isn't known primarily as an income stock, Microsoft has a decent dividend program. The company increases its payouts regularly. Microsoft's 0.7% forward yield isn't particularly impressive, but the company could maintain healthy dividend growth while providing competitive returns to long-term investors.

3. Visa

Visa faces various legal and regulatory problems, including antitrust concerns, that have affected its stock performance in recent years. However, the core business remains solid. Visa has increased its revenue and earnings at a good clip in recent quarters, and its dominant position in the payment processing market remains mostly intact.

Visa has billions of cards in circulation, and its network gets more attractive to merchants with every new cardholder, and more useful to cardholders with every new merchant. This self-reinforcing cycle underpins its wide moat.

Even with recent challenges, the company's long-term prospects -- tied to the increased demand for digital forms of payment -- remain attractive. Secular tailwinds, such as the growth of e-commerce, will help increase the company's already large remaining addressable market.

So, the future still looks bright for Visa, and the company is also an impressive dividend growth stock. Despite a forward yield of just 0.7%, Visa has increased its payouts by 306% over the past decade.

Prosper Junior Bakiny has positions in Visa. The Motley Fool has positions in and recommends Microsoft and Visa. The Motley Fool has a disclosure policy.