If you’re looking for S&P 500 stocks to buy, don’t be afraid to check out some of America’s oldest companies for potential profits. Good companies stand the test of time.
Bloomberg recently published an article discussing some of the world’s oldest companies. One of the names was Consolidated Edison (NYSE:ED), better known as ConEd, the longest continuously operating company listed on the NYSE. It’s been a member of the S&P 500 since the index was created in March 1957.
Today, approximately 54 companies from the original components remain in the index. Of those, 25 were founded before 1900, including ConEd.
This article aims to find three timeless S&P 500 stocks to buy now. I’ll select the trio of names from the 25 founded before the beginning of the 20th century. To provide some diversification, they operate in three different sectors of the economy.
Here’s to growing old gracefully.
Coca-Cola (KO)
Coca-Cola (NYSE:KO) got its start in May 1886 when pharmacist Dr. John Stith Pemberton produced it and first sold it at Jacobs’ Pharmacy for five cents a glass. Pemberton’s bookkeeper, Frank M. Robinson, suggested the name.
In 1889, it was sold to Asa Griggs Candler, who created the Coca-Cola Company in 1892. In 1919, Candler sold it to a syndicate of investors, including the Trust Company of Georgia President Ernest Woodruff, for $25 million. Woodruff asked his son Robert W. Woodruff to become CEO of Coca-Cola in 1923. He served as CEO until 1954, remaining on the board until 1984.
As a result, the Woodruff family is generally recognized as the most significant part of the company’s early development. It’s been 40 years since Robert Woodruff left Coke’s board and it’s still going strong.
Today, Coca-Cola has ventured into alcoholic beverages. Most recently, Coca-Cola partnered with Pernod Ricard (OTCMKTS:PRNDY), announcing that it would launch the Absolute Vodka and Sprite ready-to-drink pre-mixed cocktail in 2024.
“We are expanding in the alcohol ready-to-drink space, including products that use select brands from our core portfolio. We are excited about our new relationship with Pernod Ricard and look forward to the introduction of Absolut & Sprite,” stated Coca-Cola CEO James Quincey.
Warren Buffett continues to be right about Coca-Cola stock. The consumer staples company has plenty of life left after nearly 140 years.
Deere & Co. (DE)
Deere & Co. (NYSE:DE) was founded by blacksmith John Deere in 1837, who created a self-scouring steel plow. In 1848, Deere moved his company to Moline, Illinois. It’s been there ever since. Deere & Company was incorporated in 1868.
The founder died in 1886. His son Charles ran it until 1907, followed by John Deere’s grandson-in-law William Butterworth (1907-1928). John Deere’s great-grandson Charles Deere Wiman ran the company from 1928 to 1955, followed by John Deere’s great-great-grandson-in-law William Hewitt (1955-1982). Hewitt was the last of the Deere family to run the company. It’s had five CEOs, including John May, its current leader, in the 41 years since.
So, over 186 years, Deere has had just 10 chief executives for an average tenure of 18.6 years. Continuity is a big reason that DE stock is up 148% over the past five years.
An interesting thing happened on Jan. 8. Barron’s reported that one analyst downgraded DE stock while another initiated coverage with a Buy rating. The initial reaction by investors was slightly adverse. That’s not a great sign, given its shares only gained 7% in 2023.
The analyst initiating coverage was Morgan Stanley’s Angel Castillo. As I said, he gives it a Buy rating with a target price of $430, 10% higher than its current share price.
However, you should do well with the world’s largest agricultural equipment maker.
Sherwin-Williams (SHW)
Sherwin-Williams (NYSE:SHW) was founded in 1866 by Henry A. Sherwin and Edward P. Williams in Cleveland, Ohio. Sherwin became the paint company’s CEO in 1870. By 1907, Sherwin had grown the company’s annual sales to more than $10 million. Sherwin retired two years later, replaced by Walter H. Cottingham, who served until 1922.
In the 101 years since, it’s had just eight CEOs, including current boss Heidi Petz, who replaced John G. Morikis (now Executive Chairman). Once again, continuity has been helpful to its share price.
Its stock was first listed on the American Stock Exchange in 1925. It hit the NYSE in 1964, two years before its 100th anniversary. In 1991, it opened its 2,000th store. Fifteen years later, it had 3,000 stores. Eight years after that, it had 4,000 open worldwide.
Lastly, in June 2017, it completed its largest acquisition, buying Valspar for $11.3 billion. Since completing its acquisition, SHW stock gained 168%, considerably higher than the S&P 500’s 97% return over the same period.
Analysts are lukewarm about its stock. Of the 29 that cover it, 13 rate it a Buy, with 14 as a Hold and two Underweight with a target price of $315, 6% higher than where it’s currently trading.
If you look at most of its valuation metrics, its shares are fairly valued, not overpriced. If you hold for 3-5 years, you should generate index-bearing returns.
In addition, it has a very healthy balance sheet with a net debt of $11.38 billion or a low 15% of its $76.3 billion market capitalization.
On the date of publication, Will Ashworth 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.
