The ability to buy it and forget it is the nirvana of investing for retirement. After all, most individual investors don’t have abundant amounts of time and skill to do the homework needed on an ongoing basis when it comes to investing for retirement.
But by the very nature that you’re reading this, you have made the time and the effort to invest beyond just the general stock market.
So, while I cannot just give you a list of “buy and forget” stocks, I will steer you towards a collection of stocks in specific industries and markets that have a good track record of delivering growth and income for many years.
A Word On Income and the “Buy and Hold” Method
The general advice from Wall Street is to just buy and own the S&P 500 Index through mutual funds or ETFs as stocks always go up over time. Most long-term investors don’t care about dividends as much as growth. Their argument is that they don’t need income, so why have a focus on it until they retire and start to withdraw payments from their accounts?
Investors who think this way are missing the fact that dividend income is vital to building a better retirement portfolio. If not taken out, dividends pile up and can be reinvested to build up a portfolio. This brings a growth element to a portfolio when the general stock market is flat or slipping. And it also works to build up overall portfolio balances.
Even my most favored stocks are not immune to changes in their businesses, markets or general economic changes. I suggest to my subscribers of Profitable Investing that they merely do a quick review of their own holdings once a month when statements are issued. The review should include a simple question of each holding: would you buy it again and why? If you can’t easily answer yes and with a simple explanation of why – then it is time to sell and move on to something else.
But now, on to my collection of longer-term buy and own stocks.
5 Stocks to Buy for the Longer Haul
I have put together a collection of five stocks to buy that are in diverse markets and pay dividends that range from close to the average of the S&P 500 Index to many multiples more. They are in varied segments ranging from industrial and consumer products, technology, utilities, real estate investment trusts (REITs) and the energy market. And all of them are proven to well-serve their longer-term investors.
First, Compass Diversified Holdings (NYSE:CODI) is a holding company that owns a collection of industrial and consumer products companies which it buys, owns, and sometimes sells. Along the way, the company collects lots of cashflows from its underlying companies. In turn, it pays a lion’s share of the profits in the form of a big dividend, currently yielding 7.2%.
Compass Diversified Holdings (CODI) Total Return Source Bloomberg
CODI shares have delivered a total return since coming to the public market of 324.95% against the S&P 500 index’s return of 200.49%
Next is Hercules Capital (NYSE:HTGC). This is a Silicon Valley-headquartered company which seeks out new and developing technology companies in its area and beyond. It then works to finance their developments and takes equity participation. HTCG provides guidance in their development including eventual exit strategies through company sales and initial public offerings (IPOs). HTGC stock also pays a bigger dividend which currently yields 9.82%.
And the company has delivered a return since coming to the market in 2005 of 292.69% against the return of the S&P 500 Index at 238.4%.
Hercules Capital (HTGC) Total Return Source Bloomberg
On to the energy market in the reliable dividend-paying segment of oil and gas pipelines with Enterprise Product Partners (NYSE:EPD). Enterprise Products owns and operates a massive network of pipeline and related oil and gas infrastructure that is crucial to the growing petroleum industry in the U.S.
Enterprise Product Partners (EPD) Total Return Source Bloomberg
EPD generates an increasing amount of revenues and profits which in turn pays a portion in a dividend yielding 5.9%. Since coming to the market in 1998 the company has delivered a return to shareholders of 2,013.15% against the S&P 500 Index return of a mere 290.28%
Next is one of the most impressive of U.S. power utility providers, NextEra Energy (NYSE:NEE). This company provides regulated power to customers in Florida. NEE also provides unregulated wind and solar-generated power throughout North America. This combination of reliable cashflows from its regulated business and growth from the unregulated wind and solar generates ample growth in the stock price along with a modest dividend yielding 2.4%.
NextEra Energy (NEE) Total Return Source Bloomberg
And since 1980 to date, NextEra Energy has delivered a total return with stock price growth and dividend income amounting to 22,218.67% compared to the general return of the S&P 500 Index at 6,797.30%. That’s a whole new era of a return for a retirement account.
Last up is a favorite REIT that owns and manages college campus facilities and dorms around the U.S. American Campus Communities (NYSE:ACC) is the leading publicly traded college dorm REIT in the U.S. ACC continues to be a very reliable source for dividend income and growth in the underlying property values. It yields 4.02% with a dividend payment that continues to rise by an average of 4.85% per year over the past five years.
And since coming to the public market in 2004 to date, the company has delivered a return of 411.11% which compares well against the S&P 500 Index return for the same period of 276.29%.
American Campus Communities (ACC) Total Return Source Bloomberg
Now that I have presented my way to invest in the solid long-term focused stocks for growth and income, you might like to see more of my market research and recommendations for further safer growth and bigger reliable income. For more — look at my Profitable Investing.
In addition, if you find yourself in San Francisco on August 15 through 17 – please join me at the MoneyShow where I’ll be presenting my economic and market analysis and my latest investment themes and recommendations.
Neil George is the editor of Profitable Investing and does not have any holdings in the securities mentioned above, but they may be held in his model portfolios.