2 Magnificent Dividend Stocks to Buy and Hold Forever

Dividends are one of investors' most powerful tools for earning strong returns over the long run. Buying shares of strong dividend-paying companies and reinvesting the payout allows compounding to work its magic. That's partly why, over the long run, dividend stocks have vastly outperformed non-paying counterparts. It also helps that corporations that can issue regular (and growing) payouts tend to have robust underlying businesses.

With that said, let's consider two outstanding dividend stocks that are worth holding on to for good: AbbVie (NYSE: ABBV) and Zoetis (NYSE: ZTS).

1. AbbVie

AbbVie, a well-known, leading pharmaceutical company, has many of the qualities of a forever stock. First, the products it sells will never go out of style, at least until we stumble upon a way to cure all diseases, which probably won't happen anytime soon. Second, AbbVie generates consistent revenue and earnings even in times of economic troubles. The company's portfolio of medicines spans immunology, oncology, neuroscience, and other areas. Many treat chronic, sometimes life-threatening, conditions.

One exception is AbbVie's Botox Cosmetic, a product people can choose to forgo without significant consequences when the economy is down. Still, its brand name makes it a perpetual leader in its niche. The broader point is that demand for AbbVie's medicines remains high when the going gets rough, and since insurance generally helps cover the costs, patients don't bear the full burden during economic recessions.

Third, AbbVie has the innovative qualities and the deep pipeline necessary to survive patent cliffs. After expertly navigating the loss of patent exclusivity for Humira -- a medicine that generated $21.2 billion in annual sales at its peak -- a couple of years ago, AbbVie quickly returned to top-line growth and won't face another major patent cliff through the end of the decade at least.

The company's growth drivers, especially its immunology medicines Skyrizi and Rinvoq, should help it post excellent financial results through the mid-2030s at least. By then, the company will likely have found new gems to replace them.That's how pharmaceutical companies stay in business for a long time, and AbbVie has shown that it can follow this blueprint.

Then, there is the company's dividend record. AbbVie is a member of the Dividend Kings, a group of corporations that have raised their payouts for at least 50 straight years. AbbVie's own streak stands at 53. Overall, AbbVie looks like a reliable dividend payer that should continue to perform well and reward shareholders for a long time. The stock is a great forever pick for dividend seekers.

2. Zoetis

Zoetis is a leading animal health company. Its products span multiple categories, including poultry, companion animals, and fish. Zoetis also sells a variety of products for these animals. It boasts about 300 brands, with 17 of its products generating over $100 million in annual revenue. However, the company's most important long-term opportunity lies within its companion animal category, where it already generates most of its sales. There are several reasons for that.

The company's livestock segment, for instance, is cyclical. Demand for animal protein can dip significantly due to economic conditions. Other factors, sometimes unpredictable ones (such as disease outbreaks), can affect it.

In contrast, the company's companion animal unit is more stable. There is consistent demand for products to care for dogs and cats. This mirrors the recurring prescriptions people receive, which force them to refill medicines at regular intervals. And since many owners consider their pets family members, they are more than willing to pay for them.

Partly thanks to its strong performance in the companion animal category, Zoetis has remained a leader in the animal health niche, generally generating stronger revenue and earnings growth than the average, while consistently innovating and launching newer products. Over the long run, we can expect this segment to perform well as pet ownership continues to rise.

Lastly, looking at Zoetis' dividend track record, the company has increased its payouts by 502.4% over the past 10 years. Zoetis is a dream come true for income-oriented investors focused on the long game.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie and Zoetis. The Motley Fool has a disclosure policy.