The Best Dividend Stock to Buy and Hold Forever

Buying and holding a stock "forever" is a big commitment, and it shouldn't be taken lightly. If you are focused on owning for the long term like that, you need to select your dividend stocks very carefully.

Fortunately, there's one reliable dividend stock that boasts a strong business, an impressive dividend track record, and an attractive yield. Best of all, however, the stock appears reasonably priced at the moment. Here's what you need to know.

Coca-Cola: A solid business

The stock in question is consumer staples giant Coca-Cola (NYSE: KO). I don't own Coca-Cola because I own direct competitor PepsiCo (NASDAQ: PEP). I'm a bit of a contrarian, and I don't mind buying a business that is struggling, which is the case for PepsiCo right now. If you don't have a contrarian bent like mine, Coca-Cola will be much more attractive to you right now.

Image source: Getty Images.

There are two factors here. First, Coca-Cola is an industry-leading business with distribution, marketing, and innovation skills on par with any of its consumer staples peers. It is also large enough to act as an industry consolidator, using acquisitions to quickly bolster its brand and product roster. All of that comes on top of the fact that Coca-Cola operates in an industry known for being resilient to economic swings.

Second, Coca-Cola is performing very well even as the broader consumer staples sector faces headwinds from shifting consumer buying habits. To put a number on that, the beverage giant's organic sales rose 6% in the third quarter of 2025, with adjusted earnings up 6% as well.

For comparison, PepsiCo's organic sales rose just 1.3% and adjusted earnings fell 2%. Now, I believe PepsiCo will turn things around, but more conservative dividend investors will probably find Coca-Cola's strong performance far more appealing.

Coca-Cola: An attractive yield

Coca-Cola's 2.9% dividend yield is in no way the highest yield you can find in the consumer staples sector. PepsiCo's yield, for example, is a full percentage point higher at just over 3.9%. But then, Coca-Cola is eating PepsiCo's lunch right now, so there is a risk versus reward trade-off.

However, that 2.9% yield still compares very favorably to key comparison points. The S&P 500 index is yielding just 1.1%. The average consumer staples stock has a yield of 2.7%. You can find higher yields, but the combination of yield and business strength is very attractive with Coca-Cola.

Coca-Cola: A top-10 Dividend King

The next significant reason to like Coca-Cola is that its board of directors has consistently demonstrated over time that it believes rewarding shareholders with regular dividend increases is important. The company's annual dividend increase streak has reached an incredible 63 years. That puts Coca-Cola in a tie for the fifth-longest streak on the Dividend King list.

If you plan to buy and hold a dividend stock, sticking to the elite list of companies that have 50 or more consecutive dividend increases is a great starting point. Coca-Cola is at the top of that list; it has an attractive yield and a great business that is performing well. If you aren't interested in the stock yet, there's still one more selling point for you to consider.

Coca-Cola: An attractive price

Coca-Cola is a well-known quantity on Wall Street, and it doesn't go on sale very often. For most investors, a fair price will be a great entry point, but even that's not such a common occurrence. However, thanks to the broader consumer staples sector being out of favor, investors are being overly cautious with Coca-Cola.

The stock's price-to-earnings and price-to-book value ratios are both below their five-year averages. The yield and the price-to-sales ratio are both roughly average, historically speaking. Coca-Cola looks, on the whole, like a great business that is trading hands at a fair, to perhaps slightly cheap, price. For most dividend lovers, this is likely to be a very good buy-and-hold opportunity.

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