Got better things to do then scour the market 24/7 in a constant search of great stocks to buy?
You’re not alone.
While most investors at one time or another dabble with the idea of being a more active trader, most of us eventually end up deciding less is more — as we should — and opt to simply target quality stocks to buy, then hold them for the long haul.
Not only do high-quality blue-chip names tend to fare better when things get rocky for the market, but these names can dish out some surprisingly nice income to those willing to exercise a little patience.
Or, perhaps legendary investor Warren Buffett sums up this strategy best by explaining his favorite holding period is “forever.” It’s tough to argue his mindset when looking at his long-term performance.
With that in mind, here are ten set-it-and-forget-it stocks to buy for the long, long haul. An annual check-in may still be too often.
Set-It-and-Forget-It Stocks to Buy: PepsiCo (PEP)
While it wouldn’t be accurate to say PepsiCo (PEP) is bulletproof, it wouldn’t be out of line to say the company recognizes where it’s vulnerable, and knows how to fix those snags before they swell into full-blown problems.
Case in point: Rather than striving to figure out what foods and beverages it can sell to consumers today, PEP has devoted a vast amount of resources to identify and gear up for what the consumer market will look like as far out as 2050.
Better yet, heading up that effort isn’t a trained businessperson/capitalist. It’s a medical doctor.
This kind of forward thinking isn’t the only reason PEP has earned a spot on a list of stocks to buy and hold forever. With over 22 different brand names each producing sales of $1 billion or more per year, PepsiCo is in some regards its own little mutual fund, with built-in diversification.
Set-It-and-Forget-It Stocks to Buy: Disney (DIS)
For those who want in now, Disney (DIS) isn’t going to come cheap. Its trailing P/E of 24 is well beyond what most would consider a reasonable price to pay, and the forward-looking P/E of 20 isn’t much better.
But DIS may simply be one of those stocks to buy at whatever price you can while you’ve got money to buy it. Quality doesn’t come cheap.
More important to would-be investors, yes, Disney is one of those companies that makes a point of perpetuating greatness.
The purchase of the Star Wars and Marvel franchises are only a couple of examples of how the company understands the importance of retaining marketable products, regardless of their cost. This kind of thinking along with internally coming up with top character creations helps the company maintain this wide-moat status.
Few companies have mastered the art passing that torch of perpetual success down from one generation to the next the way DIS has.
Set-It-and-Forget-It Stocks to Buy: Target (TGT)
One would think of any discount retailer was going to be named as one of only 10 stocks to buy and hold forever, it would be Walmart (WMT). And to be fair, even with a string of headaches in recent years, Walmart’s sheer size means it can muscle its way to success.
Smaller rival Target (TGT), though, has some finesse that simply sets it apart from WMT.
There’s something bigger-picture going on with TGT, though. These recent changes (and more) are all part of a bigger-picture initiative from the company to get back to the roots that made it great. A Target that’s solely refocused on doing what it knows it can do well is practically unstoppable.
The 2.8% dividend yield TGT currently boasts doesn’t hurt the bullish case, either.
Set-It-and-Forget-It Stocks to Buy: Microsoft (MSFT)
No, this isn’t a typo — software giant Microsoft (MSFT) is on a list of stocks to buy that offer income and safety.
There’s no denying the company isn’t without its challenges. Its dominance in the office productivity software space with its Microsoft Office suite is waning, and for that matter, so is its dominance in the operating system arena; Microsoft Windows has few friends in the increasingly important tablet world. The company isn’t exactly killing it in the cloud-computing and storage world, either.
Rumors of the impending demise of MSFT have been greatly exaggerated, though.
As proof, know that Microsoft has posted higher sales on a year-over-year basis in eight of the past nine years, and it’s on pace to post a bigger top line again this year. Net income has grown in seven of the past nine years, and like revenue, is on pace to grow again in 2015. That’s pretty good for an allegedly “bad” company. Investors also shouldn’t scoff at Microsoft’s current dividend rate of 2.7%.
The trick? For all its headwinds, Microsoft has never lost site of the importance of recurring and renewable revenue.
Set-It-and-Forget-It Stocks to Buy: Waste Management (WM)
They say the only certainties in life are death and taxes, but that’s not quite a complete list. As long as you’re alive, you’re also going to be throwing rubbish way, which means Waste Management (WM) is as well-positioned for a bright future as any funeral home is.
Thing is, the sheer nature of the business — garbage — turns some people off before they even look at the kinds of numbers WM can (and has) put up.
Try some of these numbers on for size: Five straight years of revenue growth, a dividend yield of 3.2%, five straight quarterly earnings beats, a decade’s worth of rising dividends, and finally, earnings growth in the cards after a multiyear growth hiatus.
These are all numbers that apply to Waste Management right now. It’s not sexy in the least, but it may be the safest and smartest of all the stocks to buy in this search for set-it-and-forget-it names.
Set-It-and-Forget-It Stocks to Buy: AT&T (T)
It’s more than a little cliché, but that doesn’t mean AT&T doesn’t belong on a list of safe, income-driving stocks to buy and hold forever more.
As it has in the past, AT&T will undoubtedly have its up and downs in the future as any and all competitors seek to dethrone T from its perch. Barring a complete and unimaginable failure of the company’s management team, AT&T is apt to remain as the nation’s biggest telecom player because it already holds that title and can simply outspend and outmuscle everyone else besides Verizon (VZ) … and even Verizon isn’t completely safe.
There’s a bit of an X-factor waiting in the wings that will only accelerate earnings growth for AT&T. In February, networking giant Cisco (CSCO) posted a prediction that 2019’s mobile data traffic will be 10 times greater than 2014’s. While that rising tide will lift all the boats in the telecom arena, once again AT&T will simply use its size and cloud — and superior network — to dominate the market.
And the 5.4% yield is pretty nice, too.
Set-It-and-Forget-It Stocks to Buy: Southern Company (SO)
What would any list of stocks to buy for safety and income be without a utility stock? Much like we’re never going to stop eating food or drinking water, we’re always going to keep the lights turned on and the refrigerator running.
Enter Southern Company (SO) — the best of breed from the utility sector.
Coal, oil, gas hydroelectric, and nuclear fuel power Southern Company’s 280 power-producing units at 73 different power plants. This kind of diversity allows SO to keep producing power — and profits — regardless of sociopolitical pressures and any volatility in energy commodity prices. Indeed, its revenue and profit growth has been freakishly consistent, even if never red hot.
What’s not to like?
Set-It-and-Forget-It Stocks to Buy: Johnson & Johnson (JNJ)
Band-Aid, Listerine and Tylenol, along with HIV therapy Prezista and psoriasis drug Stelara, as well as many others brands and pharmaceuticals … all fall under the Johnson & Johnson (JNJ) umbrella.
That breadth and depth in its product line keep revenue stable, and keep the company profitable. Revenue has been up in six of the past eight years, and even when the going gets tough, JNJ finds a way of remaining impressively profitable.
Those who know JNJ well will also likely know it’s fast approaching a key patent cliff. Specifically, Velcade will lose patent protection in 2017, Remicade will see its European patent expire in 2015 while its U.S. patent protection is set to end in 2018. That’s $8.4 billion worth of the company’s sales … about 10% of total revenue.
And yet, it’s not a reason to worry. Johnson & Johnson spent more than $6 billion in drug R&D last year alone to sail past this patent cliff.
Between new pharma products and a well-entrenched OTC and off-the-shelf product line, JNJ remains one of the market’s best long-term stocks to buy simply because it perpetually has a variety of great products and brands to sell.
Set-It-and-Forget-It Stocks to Buy: Procter & Gamble (PG)
While PepsiCo and Johnson & Johnson both act like diversified mutual funds in and of themselves, there might be no company out there as intrinsically diversified as Procter & Gamble.
When you own PG shares, you own Head & Shoulders shampoo, Gillette razors, Luvs diapers, NyQuil, Crest, Swiffer sweepers, Oral-B, Dawn, Tide detergent, Duracell, Old Spice, Bounty, Pampers and Downy, plus a few dozen more brand names … brands of products we tend to habitually buy without a second thought, regardless of the strength of the economy.
And like Target, Procter & Gamble is getting back to its core business, focusing on markets it knows it can dominate. That is, PG is close to selling a big stake of its beauty and cosmetics lines — including Clairol hair products and Cover Girl makeup — to Coty (COTY) for a reported $12 billion.
With a renewed focus on cleaning and consumer staples products, Procter & Gamble could easily reclaim its position as one of the market’s truly great stocks to be for income and defense.
PG also is a cash return machine, presently boasting a dividend yield of 3.4%.
Set-It-and-Forget-It Stocks to Buy: BlackRock (BLK)
Last but not least, while there’s no denying there are some outstanding long-term ETF plays out there that could have easily earned a spot on this list of long-term stocks to buy, the best investment in the ETF space may not be one of those funds.
Instead, it may be a company that creates and manages those funds … a name like BlackRock (BLK), which owns the ubiquitous iShares ETF organization.
In other words, why buy from the middleman when you can be the middleman, collecting a perpetual toll every year?
A recent outlook from Goldman Sachs put the long-term opportunity for BlackRock, via iShares, in perspective. The investment bank believes the amount of money invested in ETFs could double to $6 trillion by the year 2020, which means the amount of money BLK earns in ETF management fees is also on pace to double over the course of the coming five years.
The dividend yield of 2.4% BLK presently dishes out could grow accordingly.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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