3 Top Dividend Stocks to Buy and Hold Forever

Key Points

• AbbVie's 2.95% yield is backed by a dozen blockbuster drugs.

• Tennant's 50-year dividend streak proves its resilience through multiple economic cycles.

• Pfizer's 7.13% yield scans as a bargain at just 7.7 times forward earnings.

• 10 stocks we like better than AbbVie ›

Dividends have quietly driven the bulk of stock market returns for over a century. While share prices grab headlines, reinvested dividends account for the majority of total returns in global equity markets since 1900. The math is simple but powerful: Steady cash payouts compounding over decades transform modest yields into exponential wealth.

Smart investors know that dividend stocks offer more than just income. They provide stability during market turbulence and participation in long-term growth. AbbVie (NYSE: ABBV), Tennant (NYSE: TNC), and Pfizer (NYSE: PFE) each offer compelling yields, backed by durable business models. Here's why these three deserve permanent spots in an income portfolio.

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AbbVie's blockbuster machine

AbbVie yields 2.95% and inherits a 50-plus year dividend growth streak from its parent Abbott Laboratories, making it a Dividend King. Since the 2013 spinoff, AbbVie has increased its dividend by 310%. The current quarterly payment of $1.64 per share represents a 5.8% increase from 2024. The 303% trailing payout ratio looks unsustainable, but that's a backward-looking metric distorted by Humira's patent cliff.

AbbVie's portfolio of 12 blockbuster drugs is filling the gap. Skyrizi for psoriasis and Rinvoq for rheumatoid arthritis are both growing rapidly, with combined sales projected to reach $31 billion by 2027. Forward payout ratios are expected to drop to 65% for 2025 and 53% for 2026. At 15.8 times forward earnings with accelerating growth, the 2.95% yield appears well covered.

Tennant's half-century streak

Tennant offers a modest 1.45% yield, but its track record speaks volumes. The cleaning equipment manufacturer has raised its dividend for 50 consecutive years, navigating recessions and market crashes without interruption. The current quarterly payment of $0.295 represents a 5.3% increase from 2024. With a 36.3% payout ratio, there's an enormous cushion for continued increases.

The company generates roughly $1.29 billion in annual revenue, selling floor scrubbers and cleaning solutions to industrial customers worldwide. At 12.5 times forward earnings, Tennant trades at a discount to industrial peers while offering five decades of proven dividend growth.

Now, the meager yield won't excite most income investors, but the conservative payout ratio leaves substantial room for continued increases.

Pfizer's deep-value play

Pfizer sports an eye-popping 7.13% yield, reflecting investor pessimism about the post-COVID-19 pandemic trajectory. The pharmaceutical giant raised its quarterly dividend to $0.43 per share in 2025, marking its 346th consecutive quarterly payment.

At just 7.7 times forward earnings, Pfizer trades at levels typically reserved for companies in decline. The 90% payout ratio suggests limited room for increases, but the valuation more than compensates.

The company just acquired obesity drug developer Metsera for $7.3 billion, positioning itself in the fastest-growing pharmaceutical market. Meanwhile, existing franchises in oncology, vaccines, and hospital medicines generate steady cash flow to support the $1.72 annual dividend.

For income investors, a 7.13% yield from a company with Pfizer's scale represents compelling value. The stock may remain dead money for growth investors, but dividend seekers get paid handsomely to wait.

The forever portfolio

These three dividend stocks offer different paths to steady income and long-term wealth creation. AbbVie provides growth with a 2.95% yield and accelerating earnings. Tennant delivers reliability through its 50-year streak and conservative payout. Pfizer offers immediate income at 7.13% with deep-value characteristics.

Together, they form a balanced dividend portfolio yielding approximately 3.8% -- well above the S&P 500's (SNPINDEX: ^GSPC) 1.2% average. Each company has proven its ability to maintain and grow dividends through challenging periods. That resilience matters more than current yields when building a forever portfolio. After all, the best dividend stocks aren't those that pay the most, but those that still pay decades from now.

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George Budwell has positions in AbbVie, Abbott Laboratories, and Pfizer. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, and Pfizer. The Motley Fool recommends Tennant. The Motley Fool has a disclosure policy.