In the immortal words of the late, great entertainer Prince, forever "is a mighty long time." For investors, though 15 to 20 years can practically feel like forever. It can be hard to find stocks you'll feel comfortable holding onto for that long.
However, three Motley Fool contributors think they've identified excellent dividend growth stocks you can buy and hold forever (or at least, the investing version of forever): Abbott Laboratories (NYSE: ABT), AbbVie (NYSE: ABBV), and Johnson & Johnson (NYSE: JNJ).
David Jagielski (Abbott Laboratories): When you're looking for good dividend growth stocks to hold for years or even decades, start by looking for businesses with diverse revenue streams and excellent track records of increasing their payouts. Healthcare giant Abbott Laboratories checks off both of those boxes for investors.
At the current share price, its dividend yields just 1.8%, which may look unimpressive at first. However, the company has increased its payouts for 52 consecutive years, making it a Dividend King. Moreover, Abbott has been paying dividends steadily for a century, with its first payment taking place back in 1924. Along the way, the company has delivered dividends to its shareholders despite wars, inflation, economic downturns, and a lot of other turbulence.
Over the past decade, Abbott has increased its quarterly payout by 150%, from $0.22 in 2014 to $0.55 today. The only reason the healthcare stock's yield isn't higher now is because its valuation rose by more than 180% over that same period. When including dividend reinvestment, the total return investors would have achieved from owning shares of Abbott for the past 10 years is around 250%.
Abbott has a slow-and-steady growing healthcare business, and has many opportunities it can pursue. Its growth rate isn't massive, but it is sustainable. And with multiple segments, including pharmaceuticals, diagnostics, medical devices, and nutrition, its operations look solid. Excluding the impact of its COVID-19 testing business, the company is projecting organic sales growth of around 10% this year.
For long-term dividend investors, this could be an ideal stock to buy and forget about.
Keith Speights (AbbVie): If you like Abbott, you might love AbbVie. The big drugmaker spun off from Abbott in 2013. Since then, it has increased its dividend by a whopping 288%. Thanks to the time it was part of Abbott, AbbVie also qualifies as a Dividend King. At the current share price, its forward dividend yield is 3.3%.