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The 10 Best Stocks To Hold Forever
By Elliott Gue
May 20, 2013
A few years ago, StreetAuthority sent a report to readers of
my Top 10 Stocks advisory covering the 10 Best Stocks to
Hold Forever.
It quickly became one of the most popular pieces of research
in StreetAuthority's history.
Simply put, these are the 10 stocks that we think you can
buy today and basically hold for the rest of your life.
When you own them, you don't have to worry about events such
as inflation or deflation, bear markets or recessions...
flash-crashes or rising interest rates.
But don't just take my word for it -- the numbers speak for
themselves...
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Here's how the 10 "Forever" stocks
have done since first being released in mid-July 2011:
-- They've returned 36.7% on average, compared with a 28%
gain in the S&P 500.
-- Our biggest winner is up 81%, with three others posting
gains above 50%.
-- Six have announced dividend increases.
I'm not telling you this to brag about our success. My job
is to help investors make money, so I want to show you why
these stocks are outperforming... and what makes them worthy
of their "Forever" status.
Before I go on though, let me be forthcoming by telling you
I simply can't reveal the full list of 10 "Forever" ideas
here. This wouldn't be fair to my
Top 10 Stocks subscribers.
But if you want to find "Forever" stocks of your own, then
you don't necessarily need my list.
There are plenty of "Forever" stocks that didn't make my
list... and once you know what you're looking for, finding
them is actually much easier than you would think.
See, on the surface my 10 "Forever" stocks don't have much
in common. They don't target a specific industry, they vary
in size and they each have their own unique business models.
But dig deeper and you'll find certain qualities that are
synonymous with most of the "Forever" ideas...
First and foremost, these are companies that dominate their
market.
Chasing high-flying tech start-ups might be profitable
during a bull market, but those stocks are often the first
to go when the market begins to heads south.
Instead, I prefer to invest in an established business that
has PROVEN it can make itself, and its investors, a lot of
money.
Take one of the "Forever" stocks, Philip Morris (NYSE: PM),
for example.
Philip Morris dominates the cigarette industry thanks to its
ownership of seven of the world's top 15 brands, including
Marlboro, the number one cigarette brand worldwide. It's not
a complex business. And you don't need to be a hedge-fund
manager to see why owning Philip Morris is likely to make
you money.
Its dominant position in its market has led to huge gains
for investors. And those gains all start with company
profits.
Philip Morris' net profit margin stands at about 28%. That
means the company turns nearly a third of its revenue into
pure profit. Most companies don't even come close to this.
The average net profit margin for all members of the S&P 500
is 13.5%.
When you invest in world dominators like this, good things
tend to happen.
But it's not enough for a company to just dominate its
market to warrant it as a "Forever" stock. I also like to
see companies reward investors by buying back stock and
paying dividends.
Since being spun off from Altria (NYSE: MO) back in 2008,
Philip Morris has bought back $30 billion worth of shares
and raised its dividend 84%, and the stock is now paying
nearly double the average dividend yield paid by the overall
market.
Over time, these shareholder-friendly moves have led to
exceptional market-beating returns.
Take a look below. In the past five years, Philip Morris has
returned 120%. Meanwhile, the overall market has barely
recovered from the recession...
It's simple. Investing in dominant firms like Philip Morris
is likely to pay off handsomely. The stock has gained nearly
52% since it was pegged one of the
10 Best Stocks to Hold
Forever.
Of course, with investing there's never a surefire thing.
There's no quality a company can possess that will guarantee
its success. But by choosing dominant, shareholder-friendly
companies, you're investing in proven companies with a
commitment to making you wealthier. I can't think of a
better long-term investment.
[Note: You can learn more about the rest of my "10 Best
Stocks to Hold Forever" -- including several names and
ticker symbols --
by viewing our latest research here.]
All the best,
Elliott Gue
Top 10 Stocks
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On January 1, 2013, there were 16 people left in the world who were born in the 1800s, according to the Gerontology Research Group. With dividends reinvested, U.S. stocks have increased 28,000-fold
over their lifetimes.
-- Morgan Housel, Motley Fool
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Disclosure: StreetAuthority
owns shares of PM and MO. In accordance
with company policies, StreetAuthority always provides readers
with at least 48 hours advance notice before buying or selling
any securities in any "real money" model portfolio. Members of
our staff are restricted from buying or selling any securities
for two weeks after being featured in our advisories or on our
website, as monitored by our compliance officer.
StreetAuthority, LLC is a publisher of financial news and opinions. StreetAuthority, LLC is not a securities broker/dealer or an investment advisor and we do not recommend or endorse any brokers, dealers or investment advisors. This work is based on SEC filings, current events, interviews, corporate press releases and publicly available information which may contain errors. All information contained in our newsletters and/or on our website(s) should be independently verified with the companies or sources mentioned. You are responsible for your own investment decisions and should always conduct your own research and due diligence and consider obtaining professional advice before making any investment decision.
StreetAuthority welcomes your comments, feedback or suggestions. Please email us at: feedback@streetauthority.com. For questions about your subscriptions or to speak with a customer service representative, please call 888-560-4728 between 9 AM to 5 PM Eastern Standard Time Monday-Friday, or via email at: customerservice@streetauthority.com. Please note that we are prohibited by law from providing any individual or personalized investment advice. As such, we cannot respond to any emails or phone calls requesting this type of information.
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Published by: StreetAuthority, 4601 Spicewood Springs Road, Austin, TX 78759.
Copyright (c) 2013 StreetAuthority. All rights reserved.
Any reproduction or redistribution in whole or in part without StreetAuthority approval is prohibited.
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