As a long-term dividend investor, I’ve learned that the hardest part of investing isn’t finding great companies, but having the discipline to hold onto them forever. After years of portfolio optimization, I have identified three dividend stocks with such powerful competitive advantages and consistent execution that they have earned a permanent position in my portfolio.
This is why these three elite dividend payers will remain the cornerstones of my investment strategy for decades to come.
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Costco Wholesale Corporation(NASDAQ: COST) may seem like a good move, given its modest dividend yield of 0.5% and high price-to-earnings (P/E) ratio of 52. However, I’m never parting with my shares because this company has built an unshakable competitive advantage through its membership model and his relentless focus on customer value. Additionally, Costco’s outstanding five-year dividend growth of 12.3% and an absolute payout ratio of 26.3% demonstrate management’s commitment to rewarding shareholders.
The proof is in the numbers. A $10,000 investment in Costco 10 years ago would be worth $81,960 today, with dividends reinvested in a tax-advantaged account – more than double the S&P500performance during this period.
^SPX data by YCharts.
What really excites me about Costco’s future is how the company continues to find ways to deepen customer loyalty. Take their famous $4.99 rotisserie chicken. Costco’s former CFO Richard Galanti openly called it an “investment in low prices to drive membership.”
This laser focus on member value has created a virtuous cycle that I believe will continue to deliver returns for decades to come.
Visa Inc. (NYSE:V) represents my bet on an unstoppable trend: the global shift to digital payments. With a dividend yield of 0.76% and an impressive five-year dividend growth rate of 15.4%, Visa combines fast-growing earnings with a bulletproof market position.
I’m holding Visa stock forever because its network effects create a nearly insurmountable barrier to entry. Furthermore, the global digital payments market is expected to grow at a blistering 21.1% annually until 2030. Visa’s entrenched position in the payments infrastructure makes it one of the primary beneficiaries of this strong growth trend.
With two-thirds of adults worldwide already making digital payments and countless countries moving away from cash payments, I foresee decades of growth for this digital payments giant.
Medtronic plc (NYSE:MDT) stands out in my portfolio due to the combination of innovative leadership and reliable income. The 3.2% dividend yield and five-year dividend growth rate of 5.97% make for a compelling mix of current income and future growth potential, even with the high 93.2% payout ratio.
What keeps me invested in the long term is Medtronic’s proven ability to expand into new markets by adapting existing technologies. The company continually finds new applications for its core technologies while maintaining its position as the largest pure-play medical device manufacturer in the world.
While Medtronic’s stock performance has been modest over the past decade (see chart below), I believe its deep research pipeline and strategic shift toward risk-based contracting will drive growth in the coming years.
^SPX data by YCharts.
These three companies show why I believe the hardest part of dividend investing is simply sitting still. Costco offers modest yields but explosive dividend growth, while Visa offers steady dividend increases supported by growing global opportunities. Medtronic delivers higher current revenues with industry-leading levels of innovation. Together they form a dividend portfolio that I will confidently maintain for decades to come.
Their distinct strengths—Costco’s loyalty moat, Visa’s network effects, and Medtronic’s innovation engine—provide diversification while sharing one crucial quality: sustainable competitive advantages that grow stronger over time. For investors looking for a truly permanent portfolio, these three dividend-strong players deserve serious consideration.
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George Budwell has positions in Costco Wholesale, Medtronic and Visa. The Motley Fool holds positions in and recommends Costco Wholesale and Visa. The Motley Fool recommends Medtronic and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.
3 Dividend Stocks I’ll Never Sell was originally published by The Motley Fool
