Best Stock to Buy and Hold Forever: Costco vs. Coca-Cola

It's always a good idea to invest for the long term because this strategy offers you the opportunity to benefit from a company's growth story -- and any bumps along the road won't be felt as much if you hang on for several years, as the good times may compensate. After all, even the best companies encounter tough market times or headwinds at some point.

And when a company is particularly strong, you may want to make it a core holding, owning it for many years -- or even forever. You'll want a company that's proven itself over time and one that offers very clear prospects.

Costco (NASDAQ: COST) and Coca-Cola (NYSE: KO) both fit the bill. But if you could only buy one right now, which is the best to buy and hold forever? Let's find out.

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The case for Costco

What I like about Costco is that it has what it takes to deliver earnings stability or even growth during tough economic times. This is because the company offers dirt cheap prices on items, so shoppers are likely to favor shopping there during these moments.

It's also important to note that Costco makes most of its profit through membership fees, meaning it's benefiting before you even set foot in the warehouse to shop. And the membership renewal rate of more than 90% in the major markets of the U.S. and Canada provides us with visibility into earnings to come.

Costco also rewards shareholders with a dividend, today at $5.20 at a yield of 0.5%, another great reason to hold on for the long term.

The case for Coca-Cola

Coca-Cola has a rock-solid moat, or competitive advantage, in the form of its brand strength and its distribution network. This has helped the world's biggest maker of non-alcoholic beverages deliver earnings growth over time. The company also has known how to expand into a variety of beverage types -- from water to coffee -- and design drinks specifically for certain markets.

Like Costco, Coca-Cola also believes in rewarding shareholders. It pays a dividend of $2.06, at a yield of 2.6% -- but most importantly, Coca-Cola has a long track record of increasing its dividend payments. It's a Dividend King, meaning it's boosted its dividend annually for more than 50 consecutive years. This shows a commitment to this strategy, suggesting it will continue. So, Coca-Cola is a dividend stock you can count on over time.

The better buy?

As mentioned, both stocks make fantastic additions to an investment portfolio, but if you're looking for a "forever" profile, think of the 1993 slogan "always Coca-Cola." With this company and its long dividend track record and brand strength, you can invest, then sit back and relax as it works for you over time.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.