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.

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