We have heard it all before: "buy and hold is dead." Not a day goes by that everyone screams and yells how amazingly dumb it is for an investor to own a stock "forever." Putting "forever" into context for me would mean to hold a stock for my retirement years. Twenty, or thirty years AFTER I have retired (or longer).
That timeframe could be different for everyone, so let's say "buy and hold throughout the retirement years," rather than forever. It sounds more realistic, right? There are plenty of stocks that folks can put into this category but I like three in particular.
3 Stocks That Can Be Held "Forever"
A criteria that is often used to evaluate great dividend paying stocks is how often and regularly a company raises its dividend. Obviously, raising dividends means more income, higher yields, and more value to the shareholders. When dividends are raised for many consecutive years, the total return of a stock is greatly enhanced. Eventually, for many investors, the actual cost of the initial core purchase of a stock is repaid in the form of those dividends, sometimes many times over.
Why wouldn't we want to own stocks that continue paying us to hold them, and give us annual raises to boot?
These three stocks have paid regular dividends for decades without missing a beat. They have also raised their dividends for a MINIMUM of 25 years in a row.
1) Exxon Mobil Corporation (NYSE:XOM): Price: $84.12/share, Dividend Yield: 2.80%
Exxon Mobil has raised dividends for 29 consecutive years. The share price has gone from $2.90 back in 1973 to $84.00 today. It is one of the two largest companies in the world based on market cap, and is the leader in the energy sector.
Owning this stock "forever" is a safer bet than virtually any other stock on the planet.
2) Johnson & Johnson (NYSE:JNJ): Price: $67.71/share, Dividend Yield: 3.75%
Johnson & Johnson has raised its dividend for 49 consecutive years. That alone should be enough to own the stock "forever." The share price has gone from $1.07 in 1969 to $68.00 today. The biggest blue chip stock within the healthcare sector has always been a force and should continue to be so in spite of the bumps and bruises of short-term issues.
Not that many stocks have a longer track record of increasing dividends consistently, while also appreciating as dramatically and regularly as Johnson & Johnson. This is another "forever" stock.
3) The Coca-Cola Company (NYSE:KO): Price: $76.64/share, Dividend Yield: 2.70%
The world's most recognizable brand has been raising dividends for 49 consecutive years. It is a blue chip monster that has virtually owned its market "forever." The share price has gone from $1.95 in 1963 to almost $80.00 today and shows no sign of slowing down in basically any economic environment.
I cannot think of a single stock I would personally rather own "forever" than Coca-Cola. It's the "real thing."
It is my firm belief that owning a stock for an extended period of time can be very profitable. A proven winner that has consistently increased its dividend over a very long timeframe is confirmation that it can continue to do just that.
I want to get paid to own shares, and get a raise every year, don't you?