2 Dividend Stocks to Buy and Never Sell

When you find a great dividend stock, there are really not many reasons to ever sell it. Thatʻs because great dividend stocks play an essential role in a portfolio.

A quality dividend stock pays you reliable, consistent income every quarter, no matter if the market is high or low. If the market is low, thatʻs when strong dividend stocks shine because that income can be reinvested in the stock to boost total return when you most need it.

Plus, reliable dividend stocks are typically good defensive stocks. They are stocks of stable, well-capitalized companies that often provide essential products or services in demand across any market or economy. For those major reasons, they deserve to be a foundational piece in a portfolio.

Here are two consistent, reliable high-yield dividend stocks to buy and never sell.

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1. Johnson & Johnson

Johnson & Johnson (NYSE: JNJ) is a household name in that many of its former products, from Band-Aids to baby powder, were in every household. But the company spun that consumer business off in 2023, and now it just focuses on pharmaceutical drugs and treatments and medical technology equipment. In that sense, it is rare to be a major player in both areas, as companies typically occupy one side or the other.

But this is part of why Johnson & Johnson is such a solid dividend stock. It has two strong revenue streams that provide stable revenue and strong cash flows, allowing it to consistently fund its dividend.

In the most recent quarter, the pharmaceutical business grew revenue by 7.8% year over year to $16.4 billion, while the medtech business increased revenue by 4.5% to $8.9 billion. Importantly, it had $8.7 billion in free cash flow in Q2 and expects to have $21 billion by the end of fiscal 2026. That robust cash generation will help it continue to fund its dividend.

And funding the dividend is something Johnson & Johnson has a long history of doing. It is a Dividend King, having increased its dividend annually for 64 straight years. Not many stocks have longer streaks than that.

It currently pays out a $1.34 per share quarterly dividend at an above-average yield of 1.96%. Along with its reliable dividend, it has been a solid performer with a five-year average annualized return of 12% and a 10-year average annualized return of 11.5%, with the dividend reinvested.

2. AbbVie

AbbVie (NYSE: ABBV) is one of the largest pharmaceutical companies in the world. Its lineup of drugs and treatments includes some of the most popular names in healthcare. Skyrizi, Rinvoq, Humira, Vraylar, Botox, and Ubrelvy are just a few of the pharmaceuticals it produces.

These blockbuster drugs have allowed AbbVie to develop a strong pipeline of new drugs and to make strategic acquisitions, such as the recent acquisition of Apogee Therapeutics, which develops drugs to treat inflammatory and immunological diseases. AbbVie currently has 90 compounds, devices, or treatments in the pipeline, with 60 in mid- to late-stage development.

In its most recent quarter, AbbVie generated about $17 billion in revenue, up 10% year over year. Its operating earnings spiked 31% year over year to $6.4 billion, and its cash flow from operations increased 7% year over year to $7.3 billion.

AbbVie stock pays a dividend of $1.73 per share at a yield of 2.6%, higher than Johnson & Johnson's. It's also a Dividend King (stocks that have raised their dividend annually for 50-plus consecutive years) with 54 straight years of dividend increases.

In addition, AbbVie stock has posted stellar returns, with a five-year average annualized return of 22.1% and a 10-year average annualized return of 19.6%. It has been the better stock for dividends and returns than Johnson & Johnson, but both would be great additions to a long-term diversified portfolio.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie. The Motley Fool recommends Johnson & Johnson and Kenvue. The Motley Fool has a disclosure policy.