The Best Dividend Stocks to Buy and Hold Forever

The Motley Fool highlights three “forever” dividend stocks for income-focused investors: Verizon (forward yield ~6.7%), Ares Capital (a BDC with a ~$29 billion loan portfolio earning roughly 10% and a forward yield ~9.1%) and PepsiCo (forward yield just under 4%). Verizon is presented as a low-growth but high-cash-flow incumbent with a consistent dividend raise record since 2007; Ares generates roughly $400 million in quarterly net income and has grown its per-share payout to $0.48; PepsiCo has faced near-term pressure—Quaker revenue fell 14% last year and net income was down 8% through H1 2025, leaving the stock >20% below its early‑2024 peak—but management’s price, cost and innovation initiatives plus analyst forecasts point to a return to modest revenue and earnings growth and its 53‑year dividend raise streak appears intact. The piece frames these names as yield-rich, lower-volatility holdings with limited capital-appreciation upside but reliable income profiles for buy‑and‑hold portfolios.

Analysis

The Motley Fool highlights three "forever" dividend names—Verizon (VZ), Ares Capital (ARCC) and PepsiCo (PEP)—with forward yields of roughly 6.7%, 9.1% and just under 4%, respectively, framing these as income-first holdings rather than growth stories. The report emphasizes industry context: U.S. wireless penetration is effectively saturated (Pew: 98% of adults own a mobile phone), limiting telecom top-line growth, while consumer staples face near-term demand and cost pressures.

Verizon is presented as the largest U.S. wireless provider by customer headcount, offering persistent cash flow and a long history of quarterly dividends (regular since 2000 and reliably raised since 2007); the stock is positioned for yield and income stability but limited capital appreciation given market maturity. Its 6.7% forward yield makes it attractive to income investors who prioritize dividend durability over growth.

Ares Capital operates as a business development company backing about 587 firms with a loan portfolio near $29 billion earning an average interest rate around 10%, producing roughly $400 million in quarterly net income and a forward yield of about 9.1%. Management has grown per‑share dividends from under $0.30 at founding to $0.48 today, but the BDC structure implies concentrated credit exposure and dependence on portfolio performance and interest spreads to sustain distributions.

PepsiCo has faced product- and inflation-driven weakness—Quaker revenue fell 14% last year and net income was down 8% through H1 2025—leaving the stock over 20% below its early‑2024 peak, yet management plans price reductions, cost cuts and increased advertising alongside product innovation. Analysts expect modest revenue and earnings growth next year and the company has raised its quarterly dividend for 53 consecutive years, supporting dividend safety despite near-term operational headwinds.

Key Decisions for Investors

• Consider a buy-or-hold posture for Verizon if income is the priority given its 6.7% forward yield and dividend track record, but limit position size if you seek capital appreciation and monitor pricing dynamics in the saturated wireless market
• Use Ares Capital for higher-yield allocation only with disciplined sizing and active monitoring of loan portfolio performance and credit spreads, since its ~9.1% yield depends on continued loan yield minus funding costs and borrower health
• View PepsiCo as an opportunistic accumulation for dividend growth investors—the 53-year raise streak and management's price/cost/marketing actions could restore modest growth—while watching Quaker revenue recovery and H2 profit trends as the primary catalysts