Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
In addition to tech blue-chip stocks to hold unto retirement, these three represent excellent options to fortify your “stocks to hold forever” portfolio. All three facilitate essential needs that will not go away unless the entire civilization (as we know it) collapses.
Stocks to Buy and Hold Forever
It’s not always a good idea to buy and hold a stock for a long time. Yet there’s one particular method of investing which is especially attractive to the buy and hold method: dividend investing.
Why is this the case? Dividend stocks allow you to earn passive income: you’ll receive a dividend payout over time. Nonetheless, it’s always important to trade stocks with the most reliable stock brokers to save on fees and increase your access to the largest investment selection.
This 183-year-old hygiene and cleaning company has spread its products into every facet of human maintenance, no matter the age or gender. If you have lived on this planet for even a short while, you have likely used some products from PG’s many brands, such as Gillette, Ariel, Mr.Clean, Pampers, Braun, and many others.
Gillette may have soured the goodwill of millions of its customers with a poor choice of marketing, but this doesn’t seem to have stuck and spread to PG’s other brands. For dividend seekers, PG has a reliable track record. As an S&P 500 company, PG has continually increased its dividend yields for over half a century, the first one being paid in 1890, and the current dividend yield at 2.3%.
The COVID-19 fallout has only increased PG’s revenue by 6%, which represents an uninterrupted continuation of a 5% growth from the previous fiscal year. More importantly, the company is not falling into the trap of spreading too thin.
Instead, the management tends to sell off brands that don’t align with the company’s global strategy. Since 2014, PG has sold off more than 100 non-core brands.
Additionally, PG keeps innovating its brands’ portfolio. For example, its latest offering of Microban 24, a product that keeps eliminating bacteria from a surface for 24 hours, was sold out during the pandemic. Despite the huge flop that was the Gillette marketing campaign, PG estimates it should exceed its annual sales, set at around $200 million.
JNJ offers the same diversity of health and hygiene consumer products as PG, but its stream of income is even more diversified. In fact, JNJ’s fiscal report for 2019 showed that the company gained half of its sales income from pharmaceutical products and one-third from medical devices. Overall, 25% of JNJ sales comes from products that were developed and launched in just the last five years.
This demonstrates the company’s forward-looking policy, always trying to fill the gaps in the product demand with research and development. Similar to PG, JNJ is great for dividends. It annually increased its dividend yield for 58 years, with the current dividend yield of 2.7%.
Lastly, to bolster its pharmaceutical sales, JNJ is set to acquire Momenta Pharmaceuticals (NASDAQ:MNTA) in a $6.5 billion cash deal. Momenta specializes in immunology, which would complement JNJ’s own pharmaceutical developments.
Operating with an inherently low-cost business model, locked down market, and inevitable electronic payments processing growth, Mastercard continually pops up as one of the top stocks to hold forever. As we transition into a cashless society with digital wallets, mobile payments, and contactless cards, Mastercard will serve as a facilitator of this great transition.
Being a facilitator at the lowest level of networking between consumers and financial institutions is a good place to be. Instead of worrying about the repayment of loans, Mastercard handles the payment-processing needs of merchants all over the world. With trillions of such transactions, Mastercard operates within a high-margin business model, with margins increasing by over 50% in the last few years.
Its fiscal report for 2019 showed an issuance of 2.6 billion Mastercards, including Maestro, which accounted for a massive $6.5 trillion worth of transactions. In addition to transaction fees, Mastercard also offers services in data analytics, cybersecurity, and loyalty reward programs. Outside of blockchain-powered transactions, it’s difficult to imagine Mastercard getting left behind, and even then, it would likely take the necessary measures to adapt.
Disclosure:Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firms specializing in sensing, protection and control solutions.