Investors thought 2021 would be a less volatile year. That narrative has run into some problems. Sure, all the major indexes are up for the year. And that’s despite the NASDAQ’s gut-wrenching 10% drop in March.
But many investors don’t feel much like celebrating. In fact, many are concerned about the liquidity that continues to be pumped into the stock market. In 2020, the pandemic flooded the economy with $6 trillion dollars of stimulus.
However, in the last few months, the Federal Reserve has introduced another $6 trillion into the economy. We would have stopped counting, but the math is pretty easy. It’s $12.3 trillion that has flooded into the economy.
Eventually, this is going to end badly. But timing the market is an imperfect science particularly when many investors are enjoying the game.
Fortunately, there’s a way to safeguard your portfolio without abandoning equities. That has to do with investing in forever stocks.
Forever stocks aren’t magic beans. They don’t go up forever. But they are stocks that have stood the test of time. And investing in these stocks will keep your portfolio heading in the right direction.
With that in mind, we’ve put together this special presentation that showcases seven of these forever stocks. These are all stocks that are household names, but that’s kind of the point. You don’t need special knowledge. You just have to recognize that these are companies that consistently do right by their shareholders.
Quick Links
- Amazon
- AT&T
- Disney
- Intel
- JPMorgan Chase
- AbbVie
- McDonald’s
#1 - Amazon (NASDAQ:AMZN)
I’m usually hesitant to put Amazon (NASDAQ:AMZN) on a list like this because it seems too obvious. And with a stock price of around $3,300 per share, many investors view Amazon as a stock that’s too expensive for their portfolio.
And there’s a reason for that. Amazon has a market capitalization of $1.67 trillion. And AMZN stock has grown over 400% in the last five years. And in the last 12 months, the stock has climbed 37%. The company is a cash-flow generating machine and has strong revenue from both its e-commerce and Amazon Web Services (AWS) businesses.
And yet for all of that, Amazon stock is up just 3% in the last six months. Many investors are looking to see if the grass is greener with one or more of these newly public companies. But it doesn’t get much greener than Amazon which, even without a dividend, merits a spot on this list.
About Amazon.com
Amazon.com, Inc engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Echo, Ring, Blink, and eero; and develops and produces media content.
Read More - Current Price
- $202.88
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 41 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $235.77 (16.2% Upside)
#2 - AT&T (NYSE:T)
AT&T (NYSE:T) is the third-largest wireless provider in the United States. It has a massive customer base and is part of the ongoing 5G rollout. But it has been a difficult stock for some investors to love. In the last five years, the stock is down 19%. And the stock is only up 6% in the last year. That’s hardly the growth that some investors have become accustomed to receiving.
But this is a list of stocks you can own forever, and AT&T certainly fits that description. The company isn’t going away and neither will demand for access to wireless data. Plus, despite the numerous commercials that suggest otherwise, wireless customers are generally pretty sticky. And the company’s $2.08 annual dividend (paid quarterly) is well supported by the projected $3.12 of earnings per share in 2021. It’s fair to want growth, but you can’t minimize the important role a dividend plays in the total return on investment.
Many investors have been concerned that AT&T has been spreading itself too thin in an effort to become a more prominent media company. To that end, the company recently sold a stake in its traditional television business. That business accounted for about 17% of sales.
About AT&T
AT&T Inc provides telecommunications and technology services worldwide. The company operates through two segments, Communications and Latin America. The Communications segment offers wireless voice and data communications services; and sells handsets, wireless data cards, wireless computing devices, carrying cases/protective covers, and wireless chargers through its own company-owned stores, agents, and third-party retail stores.
Read More - Current Price
- $22.83
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 11 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $23.40 (2.5% Upside)
#3 - Disney (NYSE:DIS)
On multiple occasions last year, I was pounding the table for the Walt Disney Company (NYSE:DIS). Of course the company was going to have a difficult year. The company was dealing with a loss of revenue from its theme parks, resorts, and cruise ships. It likely won’t be until 2022 until the company is firing on all cylinders with any of those businesses.
And yet, over the last 12 months, DIS stock is up 80%. That’s because the company has more than one way to generate revenue. In late 2019, Disney introduced its own streaming service, Disney+. The company’s theme parks were not built for a global pandemic. But Disney+ was a port in the storm for many consumers who were looking for a distraction while staying at home.
Income investors may be ready to chime in about the company suspending its dividend. And it seems likely that it won’t be reinstating the dividend anytime soon. But then again, investors who stuck with DIS stock got an 80% appreciation. Investors are just starting to see what this business looks like when all the revenue streams are flowing. I think they’ll like what they see.
About Walt Disney
The Walt Disney Company operates as an entertainment company worldwide. It operates through three segments: Entertainment, Sports, and Experiences. The company produces and distributes film and television video streaming content under the ABC Television Network, Disney, Freeform, FX, Fox, National Geographic, and Star brand television channels, as well as ABC television stations and A+E television networks; and produces original content under the ABC Signature, Disney Branded Television, FX Productions, Lucasfilm, Marvel, National Geographic Studios, Pixar, Searchlight Pictures, Twentieth Century Studios, 20th Television, and Walt Disney Pictures banners.
Read More - Current Price
- $114.27
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 19 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $123.83 (8.4% Upside)
#4 - Intel (NASDAQ:INTC)
Intel (NASDAQ:INTC) may not be the first name to come to mind in the semiconductor sector. But if you’re looking for a forever stock, you need to give Intel a close look. This isn’t about how many chips the company can crank out. It’s about the fact that Intel has a significant cache of intellectual property that includes a slew of best-in-class patents that are in demand.
Investors are taking notice, INTC stock is up 30% in the last six months. With the global chip shortage, there’s no reason to believe that growth is slowing down anytime soon.
And when you are checking boxes on Intel as a buy-and-hold addition to your portfolio, you have to consider its dividend. The rule of 72 suggests that you if a dividend grows at an average rate of 7.2% it will effectively double in 10 years. Intel’s dividend has gone from 18 cents in 2011 to its current level of 35 cents and in the last three years has grown at a rate of 22.5%
About Intel
Intel Corporation designs, develops, manufactures, markets, and sells computing and related products and services worldwide. It operates through Client Computing Group, Data Center and AI, Network and Edge, Mobileye, and Intel Foundry Services segments. The company's products portfolio comprises central processing units and chipsets, system-on-chips (SoCs), and multichip packages; mobile and desktop processors; hardware products comprising graphics processing units (GPUs), domain-specific accelerators, and field programmable gate arrays (FPGAs); and memory and storage, connectivity and networking, and other semiconductor products.
Read More - Current Price
- $24.01
- Consensus Rating
- Reduce
- Ratings Breakdown
- 1 Buy Ratings, 25 Hold Ratings, 5 Sell Ratings.
- Consensus Price Target
- $30.12 (25.4% Upside)
#5 - JPMorgan Chase (NYSE:JPM)
The demise of the “big banks” has been proven wrong more times than investors can count. It’s not to say they haven’t had their problems. Even JPMorgan Chase (NYSE:JPM) got caught up in a controversy of its own making with its backing of a European Super League that created a strong backlash from the international soccer community. And this came on the heels of JPMorgan CEO Jamie Dimon’s recent comments that support corporate activism in the body politic.
However, those investors who have been long in JPM stock over the last five years have been rewarded with a gain of over 130%. And if you go back to 2007 (before the financial crisis), JPM stock has outperformed the S&P 500 Index.
That’s the definition of a forever stock. And over that time, the bank’s dividend has been steadily increasing. Today the quarterly dividend sits at 90 cents per share and has increased at a rate of 76% in the last three years.
About JPMorgan Chase & Co.
JPMorgan Chase & Co operates as a financial services company worldwide. It operates through four segments: Consumer & Community Banking (CCB), Corporate & Investment Bank (CIB), Commercial Banking (CB), and Asset & Wealth Management (AWM). The CCB segment offers deposit, investment and lending products, cash management, and payments and services; mortgage origination and servicing activities; residential mortgages and home equity loans; and credit cards, auto loans, leases, and travel services to consumers and small businesses through bank branches, ATMs, and digital and telephone banking.
Read More - Current Price
- $240.78
- Consensus Rating
- Hold
- Ratings Breakdown
- 10 Buy Ratings, 7 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $229.31 (4.8% Downside)
#6 - AbbVie (NYSE:ABBV)
It was a little understandable that investors cooled on AbbVie (NYSE:ABBV) in 2020. Investor dollars in the biotech sector were flooding into companies racing for a Covid-19 vaccine or therapeutic. Some investors were also a little unsure about revenue as the company’s flagship drug, Humira, had lost its European patent protections.
But Humira is still protected in the United States through 2022. In the meantime, the company has a strong pipeline with drugs like Skyrizi and Rinvoq. Plus the company acquired Allergan in 2020 which only adds to the company’s potential growth.
And AbbVie is a great example of a company that delivers both a large dividend and a great yield. The current quarterly dividend is $1.30 per share and has increased 84% in the last three years. And the company’s current dividend yield is 4.70%.
ABBV shares are only up 5% since the start of the year which is presenting investors with a terrific opportunity to enter or expand their position in this forever stock.
About AbbVie
AbbVie Inc discovers, develops, manufactures, and sells pharmaceuticals worldwide. The company offers Humira, an injection for autoimmune and intestinal Behçet's diseases, and pyoderma gangrenosum; Skyrizi to treat moderate to severe plaque psoriasis, psoriatic disease, and Crohn's disease; Rinvoq to treat rheumatoid and psoriatic arthritis, ankylosing spondylitis, atopic dermatitis, axial spondyloarthropathy, ulcerative colitis, and Crohn's disease; Imbruvica for the treatment of adult patients with blood cancers; Epkinly to treat lymphoma; Elahere to treat cancer; and Venclexta/Venclyxto to treat blood cancers.
Read More - Current Price
- $167.74
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 18 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $203.37 (21.2% Upside)
#7 - McDonald’s (NYSE:MCD)
I have occasion to pass my local McDonald’s (NYSE:MCD) nearly every day. This particular location in small-town America is still not open to dine-in customers. But I keep thinking, why would they ever reopen their doors again? The drive-thru is always busy. The new normal seems to be working just fine for the Golden Arches.
What this tells you is that McDonald’s has made a successful pivot to a digital model. In fact the company is saying that digital is not only its present, but also its future.
But I understand that anecdotes don’t make your portfolio grow. So let’s go with this. In the ten-year period ending April 2, 2020, MCD stock had delivered a total return for investors of over 180% without reinvested dividends. If an investor had reinvested dividends the return would be over 250%.
And speaking of that dividend, the company currently pays a quarterly dividend
About McDonald's
McDonald's Corporation operates and franchises restaurants under the McDonald's brand in the United States and internationally. It offers food and beverages, including hamburgers and cheeseburgers, various chicken sandwiches, fries, shakes, desserts, sundaes, cookies, pies, soft drinks, coffee, and other beverages; and full or limited breakfast, as well as sells various other products during limited-time promotions.
Read More - Current Price
- $290.89
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 18 Buy Ratings, 12 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $319.46 (9.8% Upside)
In times of market volatility, it’s wise to remember that this is but a moment in time. Investors of a certain age can point to previous times when experts were proclaiming the sky was falling. And many of these investors can point to times when they wish they had zigged instead of zagged. But they can probably also point to some great outcomes that occurred by just holding onto some quality stocks.
True long-term investing is measured in years, not months. And as our list shows you, it doesn’t have to be limited to dividend stocks. You can, and should, look for stocks that can give you some growth. But while speculating on the next multi-bagger can be fun, having a solid base for your portfolio is a much better way to sleep soundly no matter what madness is captivating the market.
If that’s an investment style that suits you, consider one of these seven forever stocks. Each one offers a business model that will provide stability and growth to help your portfolio stand the test of time.
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