The good thing about forever stocks is you only have to buy them once.
A passive, long-term approach to investing has several advantages. For one, it doesn’t rely on predicting difficult, if not impossible, short-term fluctuations.
Buying forever stocks results in a stable core portfolio of investments that repeatedly provide better returns than actively managed investments.
Buying forever stocks is the strategy of legendary names including Warren Buffett and Jack Bogle among others.
The strategy requires a firm belief in the value of well-run companies with established businesses. Most of the forever stocks below have been around for several decades at least.
But there’s also reason to believe that younger companies are worthy of taking a long-term view as well.
Investing in Mastercard (NYSE:MA) stock right now is a simple decision as this is one of the forever stocks that has staying power. The company is an integral part of the consumer finance industry and connects businesses, consumers, and merchants to one another via payments.
In 2022, Mastercard’s business boomed for a few reasons. When Covid-era restrictions vanished, international travel increased dramatically. Mastercard saw its cross-border volume increase by 45% in 2022. Overall, consumers used their credit cards more, resulting in revenues that increased by 18% at the company.
With consumer credit card debt again reaching new heights post-pandemic, Mastercard looks to be in a sound position.
It wouldn’t be surprising if Mastercard receives very high fee income moving forward if delinquencies rise and higher charges ensue.
It’s difficult to see that not occurring as savings are drawn down and credit card use spikes. The signs are clear and macroeconomic realities make it a good time to buy MA stock.
MercadoLibre (NASDAQ:MELI) is an outlier relative to other stocks on this list. The eCommerce company is by far the youngest listed here and has a far shorter track record.
It is established and stable but is lacking relative to other firms. However, its progress and potential make it a long-term buy despite its relative youth.
The company is the eCommerce champion of the Latin-American region, often referred to as the region’s Amazon.
When you look into the company’s growth and metrics, it’s easy to draw such a comparison. MercadoLibre’s eCommerce revenues grew by an astounding 56.6% in Q4, to $3.0 billion.
Its fintech/payments business is especially impressive, having processed $36 billion of payments, up 80% on a year-over-year basis.
And MercadoLibre continues transforming its logistics into a world-class operation. It handles 2.5X the volume it did in 2019 and now delivers 80% of packages in 48 hours, up from 44% in 2019.
That snapshot of short-term wins alludes to a much greater narrative being built with long term success in mind.
As a result, it is now the world’s most valuable company based on market capitalization.
The past decade was extraordinarily kind to growth firms, as interest rates remained near zero. While that certainly contributed to Apple’s massive growth during the period, the next decade will undoubtedly be different. T
hat doesn’t mean Apple can’t provide strong returns. The iPhone, Mac, and iPad seller has become integral to society.
My colleague Will Ashworth expects Apple to grow at an annual rate close to 20% over the next decade. That rate will multiply any investment’s value and is a return any investor would gladly receive.
AAPL stock remains the biggest component of Warren Buffett’s portfolio by a long shot. That alone should tell investors a lot about its long-term prospects.
One way to choose forever stocks is buying iconic brands like Coca-Cola (NYSE:KO). That such companies have been around for so long and have become inseparable from our society speaks volumes.
Those factors suggest that demand is unlikely to decline simply because of how deeply ingrained the company is within our culture. In actuality, no brand may be more iconic than Coca-Cola. Therefore, it’s likely to continue to flourish.
Demand for Coca-Cola brand products grew by 5% in 2022 based on unit case volume. That led to a sales increase of 11%.
However, in Q4 demand actually declined by 1% contradicting my thesis above. The good news is that the companywide revenues increased by 7% in the quarter despite sagging volume.
Whatever the case, KO stock has emerged as an ultra-dependable investment, especially over the past year.
Its dividend is as sure as they come having last been reduced in 1963. It will provide income forever and likely share price appreciation at the same time.
JPMorgan Chase (JPM)
The firm now looks to become even stronger as a result of overall regional bank weakness. JPMorgan Chase’s dominant position will only increase as a result of current turmoil. It will extend its lead over the U.S. banking sector in the coming years.
The bank recently led the charge to infuse First Republic Bank (NYSE:FRC) with capital. Big banks are better run than they were in the last financial meltdown.
But regional banks lacking in risk management and regulatory oversight foundered. The result played out over the past few weeks.
JPM stock is one of the primary beneficiaries of the debacle. Deposits flooded in following the Silicon Valley Bank collapse. The company is now perceived as a bastion of security in the banking sector.
Costco (NASDAQ:COST) stock has received a lot of attention over the last year as Americans’ finances have weakened. Consumers are seeking deals anywhere they can and Costco’s bulk foods fit that bill.
Costco isn’t just a short-term value. Over the past decade, it has provided a 19.3% average annual return.
Another thing to note is just how quickly Costco has grown more than doubling its revenue base between 2014 and 2022.
Over the last 24 weeks, sales have grown by 5.9% and 6.8% in the last 12 weeks. Costco simply has so much going that it seems obvious to bet on the company over the long term. Currently, analysts expect approximately $50 of upside beyond its $495 share price over the next 12-18 months.
Altria (NYSE:MO) remains a very interesting stock to invest in right now. On the one hand, the tobacco giant is clearly facing problems. The war on smoking is working and Altria saw revenues decline by 3.5% in 2022 and 2.3% in the fourth quarter.
The company has rebranded itself toward a primarily smoke-free future. It is enticing current investors with heavy share repurchases and high-yield dividends while also purchasing assets in growth areas.
The company completed its $3.5 billion share repurchase program at the end of 2022 and authorized a new $1 billion share repurchase program.
Altria paid $6.6 billion in dividends in 2022 alone. That dividend currently yields 8.44% and hasn’t been reduced since 1970(2).
But Altria must continue moving into smoke free tobacco. Falling revenues necessitate it. The company purchased vape brand NJOY Holdings recently.
People will continue to use nicotine whether in cigarette form or vapes or whatever else can be created to deliver it. That simple fact means Altria should continue to provide investor returns even as cigarette sales decline.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.