Every portfolio needs to have stocks that are geared toward the long run. There are certain choices that are obviously better than others, but these three below are solid companies that have proved themselves year after year. Each stock pays a fair dividend (better than bank money market or cd yields), and arguably can be considered almost as safe. (Please still consider all risks before making any investment decision).
1.) Caterpillar, Inc. Common Stock (NYSE:CAT) manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. This company operates in the Farm & Construction Machinery industry, and is currently trading at $80.6, and has a rock solid foundation. This company has a whopping current EPS of 6.05 and P/E of 13.34 and pays a current 2.4% dividend yield, better than any bank rate and arguably safer. Despite the slowdown in housing and the economy CAT is still growing, and just a few days ago opened a new 270,000 square foot facility in North Carolina. It currently has a ROA of 5.65% and ROE of 34.36% with a 4-star S&P rating. I think this is a position to have for any long-term portfolio.
2.) Chevron Corporation Common Stock (NYSE:CVX) specializes in refining of crude oil, exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids projects. This company operates in the Major Integrated Oil & Gas industry and is currently trading at $98.43, and is another solid pick. CVX boasts an unreal EPS of 11.45 with a P/E of 8.6x. ROA is 10.94% and ROE is 21.33%. CVX also has a projected earnings growth ratio of 1.43, and currently pays a dividend yield of 3.3% and has a 5-star S&P rating. This company has a current debt/equity ratio of 9.89 and a long history of returns. This is a solid long-run position to have.
3.) Exxon Mobil Corporation Common Stock (NYSE:XOM) engages in the exploration and production of crude oil and natural gas, and the manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. This company operates in the Major Integrated Oil & Gas industry and is currently trading at $76.04 and has a 1-year price target of $90.44, which I believe will be even higher the following year and years to come. XOM has an EPS of 7.59 and a P/E ratio of 10.01x. The current dividend yield is 2.6% and it also holds a 5-star S&P rating. Current price to book is 2.38 and the profit margin is 9.66%. ROA is 10.13% and ROE is 25.32% and it has a low beta of 0.46. Oil & Gas are obvious picks, but when you are looking to make serious investments for the long run aside from CVX, XOM is a great buy.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.