Buying a dividend stock and forgetting about it isn’t as simple as it sounds, even for seasoned income investors. The market could crash, the income potential might not be worth it, and you might end up thinking that your money is better off somewhere else.
That said, the buy-and-forget approach isn’t impossible either. Buy-and-Forget stocks are investors’ “core holdings” that they keep forever, regardless of what happens. And today, I came up with three such dividend stocks from the Dividend Kings list that anyone can hold for as long as they like. Dividend Kings are companies that not only have solid track records of paying dividends, but they have also increased them for over 50+ years.
Using Barchart’s free screener tool, I utilized the following filters:
Investing Ideas: Dividend Kings.
Current Analyst Rating: 4 to 5. I prefer companies with generally positive consensus from analysts.
Number of Analysts: 20 or more. The more analysts covering the company, the better and more reliable the consensus is.
Market Cap: Large to Mega. Companies with a higher market cap are generally safer for this strategy.
60-Month Beta: 0 to 1. I want companies that are relatively stable compared to the broader market. I consider anything above 1 point as volatile.
5-YR Percent Change: 20% and above. Beyond income potential, I also prefer to have a bit of capital appreciation potential.
FWD Dividend Yield: I left this blank on purpose, so I can sort the list from the highest to the lowest-yielding company.
After running the filters, I was left with 5 companies; I’ll cover the top three, highest-yielding Dividend Kings to buy-and-hold forever.
AbbVie develops drugs for conditions like cancer and immune system disorders. Their primary focus is to develop traditional medicines and advanced therapies for people with complex conditions.
Right now, AbbVie’s stock is trades around $227 and has gained about 112% over the past 5 years. Its 60-month beta is 0.50, so it’s relatively stable.
AbbVie pays a forward dividend of $6.56, distributed $1.64 per share per quarter. This payout translates to a 2.9% forward yield. The dividend payout ratio is 68.08% of the company’s earnings, which is in a very acceptable range.
Financials-wise, AbbVie’s recent annual revenue rose 3.7% to $56.33 billion. However, net income declined 12% to $4.27 billion, or $2.40 basic EPS, mainly driven by a significant increase in R&D expenses.
Meanwhile, a consensus of 28 analysts rates AbbVie a Moderate Buy with a score of 4.14 out of 5. That is pretty close to a Strong Buy rating. This score has been relatively stable over the last 3 months. The high price target for the stock is $289, suggesting as much as 27% upside from current levels.
The next Dividend King needs little to no introduction: the Coca-Cola company. Almost every person on the planet comes across a Coca-Cola product, at least once a day. They own a wide array of beverage drinks beyond the iconic Coca-Cola.
Today, the stock trades around $72, and has gained >35% over the past 5 years. Not explosive, but the upward trajectory is clear. The 60-month beta is 0.43, which proves the stability of this stock relative to the broader market.
Coca-Cola pays a forward dividend of $2.04, paid $0.51 every quarter, reflecting a forward yield of 2.86%. The company’s payout ratio is 67.64%, which is also very acceptable to income-growth investors.
Last year, Coca-Cola’s annual revenue rose 2.8% to around $47 billion, while net income decreased less than 1% to $10.63 billion, or $2.47 per share, as operating expenses rose slightly.
Based on consensus among 24 analysts, Coca-Cola stock has an average Strong Buy rating with a near-perfect score of 4.75 out of 5. The score was relatively stable over the last 3 months – or perhaps, even years. The high target for Coca-Cola is $85 per share, which translates to an upside of 17% from current levels.
Finally, the last Dividend King on my list is Johnson & Johnson, a healthcare giant that operates in several segments, including pharmaceuticals, medical devices, and consumer health products. Johnson & Johnson also develops treatments for complicated health conditions.
Today, JNJ stock trades at about $207 per share and has gained ~38% over the past 5 years. Not overly explosive, but the stock is certainly stable, with a 60-month beta of just 0.38.
Payout-wise, Johnson & Johnson pays a quarterly dividend of $1.30, which translates to a forward annual dividend $5.20 per share, translating to a yield of about 2.6%. The payout ratio is also within a very acceptable range of 48.63%.
The company’s most recent annual revenue increased 4.3% to $88.82 billion. Meanwhile, net income declined 60% to $14 billion, or $5.84 per basic share. However, investors need to remember that 2023’s net income is inflated, as J&J recorded a one-time gain of roughly $21 billion from spinning off Kenvue, its Consumer Health segment. As a result, 2026’s number should be normalized against this FY.
Meanwhile, a consensus among 25 analysts points to a Moderate Buy rating with a score of 4.12 out of 5, and this has been gradually increasing in recent months. The high price target for JNJ is $230 per share, implying roughly 11% upside potential from where we are now.
Mega-cap Dividend Kings are some of the safest options for a buy-and-forget strategy. For the companies mentioned above, the chance of them reaching zero is also almost zero. However, the market can do funny things. The smart money keeps on top of the news, watches the financials, and reinvests those dividends for explosive compound growth- especially if there are years before the income is ever needed.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
