The Best Dividend Stocks to Buy and Hold Forever

Dividend stocks let investors combine long-term returns with consistent cash flow. Some corporations deliver high yields but are mature and underperform the S&P 500. Other high-growth firms can trounce the stock market but have low dividend yields.

However, there are some dividend stocks that offer good yields right now and have attractive long-term growth prospects. These two stocks may be some of the best dividend stocks to buy and hold at current levels.

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Silicon Motion Technology addresses memory storage

Silicon Motion Technology (NASDAQ: SIMO) is a Hong Kong-based, dividend-paying tech company that specializes in NAND flash controllers for solid-state storage devices. Those controllers are used in smartphones, Internet of Things (IoT) devices, and other applications.

While Silicon Motion Technology has prioritized consumer products over the years, demand from artificial intelligence (AI) data center infrastructure is a long-term tailwind. The AI build-out is intensifying, with big tech aiming to spend $650 billion on AI this year. AI chips require NAND flash controllers, such as those provided by Silicon Motion Technology.

Traction in the AI infrastructure expansion helped Silicon Motion Technology deliver 46% year-over-year revenue growth for investors in Q4. CEO Wallace Kou told investors that the company expects a "significantly stronger-than-seasonal start" in the first quarter.

Acceleration has been meaningful since Silicon Motion Technology delivered only 10% year-over-year growth throughout 2025. That's probably part of the reason that shares are up by 130% over the past year. Silicon Motion Technology also has a respectable 1.56% yield. You can get a solid yield and long-term growth, but if the stock continues to rally, the yield will shrink in a hurry.

The emerging AI stock also has plenty of cash to support future dividend growth. It has $277.1 million in cash, cash equivalents, and restricted cash. The company only distributed $16.7 million to shareholders in Q4. Its cash position can cover dividends for multiple years even if it remains unchanged, and Silicon Motion Technology's growth implies that its cash reserves will increase over time.

Microsoft's yield has soared amid a sharp correction

Microsoft (NASDAQ: MSFT) is one of the largest tech companies on the stock market, and while it has historically had a low yield, payouts have been inching higher amid a prolonged correction.

The tech giant's 15% year-to-date decline has set the stage for a 0.91% yield. That's not life-changing by any means and isn't the type of dividend that attracts income investors. However, Microsoft is still growing at a fast rate and trades at only a 25 price-to-earnings (P/E) ratio thanks to the market's overreaction.

The growth stock is down by more than 25% from its all-time highs, but the most recent earnings report suggests the company is still growing and doing everything it's supposed to. Q2 fiscal year 2026 revenue jumped by 17% year over year, with Azure and other cloud services revenue surging by 39% year over year. The company also returned $12.7 billion to investors through stock buybacks and dividend distributions.

Some investors are concerned about Microsoft's rising AI spend, but those expenditures have contributed to real revenue and net income growth. For instance, Microsoft delivered 60% year-over-year net income growth in Q2 fiscal 2026. Those types of results justify the AI investments and make the market's reaction all the more jarring.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.