2 Unstoppable Dow Dividend Stocks to Buy and Hold Forever

The iconic Dow Jones is the worst-performing of the three major U.S. indexes this year; it is slightly in the red as of this writing. However, some Dow stocks have performed well, especially considering the significant volatility broader equities have experienced.

Microsoft (NASDAQ: MSFT) and Coca-Cola (NYSE: KO) are among those corporations on the Dow Jones that are breaking ranks (so to speak) with their Dow peers. It wouldn't be wise to invest in these companies just because of their performance since the beginning of 2025. Even corporations with unimpressive prospects can sometimes beat the market for a mere six months. However, focusing on Microsoft and Coca-Cola's underlying businesses helps reveal why they are excellent buy-and-hold options for long-term investors. Read on to find out more.

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1. Microsoft

Although Microsoft started the year on a sour note, more recent developments have given the stock new life, and shares are up by 11% year to date. Looking at the company's results for the third quarter of its fiscal 2025, ending on March 31, should give long-term investors plenty of hope. It's not just because it reported solid top- and bottom-line numbers; the most promising segment also continues to make headway.

Microsoft Azure, the company's cloud unit, recorded revenue growth of 33% for the period. The tech leader's total revenue increased by a far more modest (but still strong) 13% year over year to $70.1 billion. Azure is second only to Amazon Web Services in this industry and has been gaining ground on its competitor.

Moreover, artificial intelligence (AI) is helping to improve the segment, and that's where the company's most obvious long-term opportunity lies. Also, Microsoft benefits from a wide moat thanks to switching costs within its cloud unit and its suite of productivity tools, as well as its strong brand name.

The company also generates significant free cash flow. Though its trailing-12-month free cash flow has declined by 6.4% compared to this time last year, $69.4 billion is nothing to sneeze at.

Microsoft's consistent profit and ability to generate cash have typically enabled it to reinvest in the business and pursue other lucrative opportunities, even as some of its former fast-growing segments mature. Expect much of the same in the future.

Another aspect that makes Microsoft attractive to long-term investors is its balance sheet. It has the highest credit rating available from S&P Global, even higher than that of the U.S. government.

Lastly, the tech giant is a strong dividend stock. Its forward yield isn't impressive at 0.7%, but it has raised its payouts by 167.7% in the past 10 years. Microsoft combines growth and dividends, and it looks like a reliable stock to hold on to for good.

2. Coca-Cola

Coca-Cola has performed relatively well for most of the year, perhaps because of the perception that consumer staples stocks are worth owning when the economy tanks. There is also the fact that the beverage leader might be able to handle President Donald Trump's trade policies (if they stick around beyond his administration) better than most. Coca-Cola markets its products in most countries, but it does most of the manufacturing for each region locally.

So, there won't be a significant impact of tariffs on its financial results. That means the company is somewhat likely to navigate the current situation rather well, and the stock also has important strengths that make it a top long-term pick.

Perhaps the most important is brand power. Companies with valuable brand names benefit from high customer trust and loyalty, pricing power, and other perks. Coca-Cola fits the bill -- most people worldwide easily recognize its famous logo. It also owns plenty of other, smaller brands, many of which are popular in their own niches.

Strong brands give it the flexibility to adjust its product portfolio according to changing tastes and preferences. If an unknown company introduces a new drink, it typically requires significant marketing and advertising before it becomes widely consumed.

A company like Coca-Cola has far less work to do to get to that goal. And here's another advantage of brand power: It doesn't have to fight for shelf space in grocery stores.

For newcomers in the field, getting into major retail places is a significant accomplishment. For Coca-Cola, it's a given. Store owners know its brands will sell well.

All of these factors make the business reliable and capable of performing well over the long term. The company's dividend track record also provides evidence of that. It has raised its payouts for 63 consecutive years, making it a Dividend King. Its 2.8% yield is higher than the S&P 500's average of 1.3%.

Coca-Cola isn't the most exciting stock on the market, but the company's stable underlying operations make it a top forever pick.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Prosper Junior Bakiny has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Microsoft, and S&P Global. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.