Investment
The Motley Fool

2 Dividend Growth Stocks to Buy and Hold Forever

July 6, 2025
07:05 AM
4 min read
AI Enhanced
stocksfinancialhealthcarepharmaceuticalsmarket cyclesseasonal analysismarket

Key Takeaways

For investors focused on the long game, there is little reason to sell -- at least, so long as a company generates solid returns through consistently imving financial results, regularly...

Article Overview

Quick insights and key information

Reading Time

4 min read

Estimated completion

Category

investment

Article classification

Published

July 6, 2025

07:05 AM

Source

The Motley Fool

Original publisher

Key Topics
stocksfinancialhealthcarepharmaceuticalsmarket cyclesseasonal analysismarket

For investors focused on the long game, there is little reason to sell -- at least, so long as a company generates solid returns through consistently imving financial results, regularly increases its dividend (if it pays one), and maintains strong growth spects

Although it's sometimes difficult to find corporations that can do all that over long periods, stocks of this caliber do exist

Consider the ing two healthcare leaders: Zoetis (ZTS 0. 06%) and Eli Lilly (LLY 0

They have checked all of those boxes over the past decade, and there are good reasons to believe they can continue to do so for a very long time, making them excellent "forever" stocks

Read on to learn more these companies

Image source: Getty Images

Zoetis Zoetis is a leading animal health company with a diverse portfolio of ducts spanning various, including stock, companion animals, and more

The company has 15 ducts that generate over $100 million in annual sales and consistently grows its revenue at a rate faster than most of its peers

Between 2014 and 2023, the company's top line increased at a compound annual growth rate of 8%, compared to the 5% the industry average

The company has encountered some headwinds recently

Most notably, recent drug apvals by competitors could challenge the market of one of Zoetis' most significant growth drivers, Apoquel, which helps treat allergic itch in dogs

Even so, Zoetis has dealt with competition for years and has still performed well

Although this issue may somewhat affect its results in the short term, the company's spects look attractive for several reasons

First, Zoetis will continue to launch newer ducts

It has ven itself to be an innovative leader in the animal health industry

Some of Zoetis' recent apvals, such as Solensia (first apved in 2022) and Librela (first apved in 2023) -- which treat osteoarthritis pain in cats and dogs, respectively -- are already helping drive sales growth

There will undoubtedly be plenty more such commercial launches in the future

In the long run, Zoetis will benefit from the growth in the pet population, which has been for several decades in countries the U. , as well as other trends such as increased demand for tein sources due to human population growth, resulting in a greater need for ducts that help care for stock

Zoetis can ride these tailwinds for a very long time

Finally, the company offers a solid dividend gram, despite a forward yield of just 1. 3%, which is equal to the average yield for the S&P 500 index

Still, Zoetis' payouts have increased by an impressive 502% over the past decade

Yet its payout ratio of 31. 6% remains conservative

There is ample space for more dividend hikes for Zoetis

Expect the company to offer consistent payouts and solid returns over the long run

Eli Lilly Eli Lilly has garnered significant attention in the past five years for its work in weight management, but the company has also quietly increased its dividends at a steady pace

The drugmaker's payouts have doubled over the past five years

That's not surprising

Eli Lilly's seems to be firing on all cylinders

Revenue and earnings have been growing rapidly

The company's first-quarter top line jumped 45% year over year to $12

Most similarly sized pharmaceutical leaders would be thrilled to increase their revenue by a third of that percentage

That speaks volumes Eli Lilly

And while its recent clinical and regulatory successes in the anti-obesity space are doing most of the heavy lifting, the company isn't a one-trick pony

Eli Lilly has blockbuster medicines in other areas, such as immunology -- with Taltz -- and oncology, thanks to Verzenio

Even the company's pipeline is diversified across multiple therapeutic areas

It has recent apvals, too

Such ducts as Kisunla, which treats Alzheimer's disease, could eventually generate more than $1 billion in annual sales

Here's the point: Eli Lilly is an incredibly innovative company with a leadership position in diabetes and obesity, as well as significant foots in other fields

The company is well positioned to develop new and imved ducts while generating above-average returns over the long term

That's why dividend investors shouldn't be turned off by the company's low 0. 8% forward yield

Eli Lilly's solid track record and modest cash payout ratio of 44% tell us plenty

That, combined with Eli Lilly's strong underlying, makes it an attractive buy-and-hold option

Sper Junior Bakiny has positions in Eli Lilly

The Motley Fool has positions in and recommends Zoetis

The Motley Fool has a disclosure policy.