5 Stocks You Will Want to Own for the Long Term, or Forever

As an investor, you have been told that you cannot control the timing of the market. So you are probably looking for the best stocks to hold for the long term. After all, billionaire investor Warren Buffett said that when he owns stocks in well-managed companies, "his favorite holding period is forever."

Eternity is an exceptionally long time, even for a buy-and-hold investor like Buffett. But his statement begs the question, "What stocks are worth keeping forever?"

Buffett's answer to that question was published in Berkshire Hathaway's 2019 letter to shareholders: “We are constantly looking to buy new businesses that meet three criteria. First, they must earn good returns on the tangible net worth necessary to operate. by capable and honest managers. Finally, they must be available at a reasonable price. "

With that in mind, here are eight suggestions, including Berkshire Hathaway itself and three companies (Apple, Johnson & Johnson, and Amazon.com) in Berkshire's investment portfolio.

Apple (AAPL)

On August 2, 2018, Apple became the first American company to have a market capitalization of $ 1 trillion. As of September 30, 2020, Apple was the largest stake in Berkshire Hathaway's portfolio, worth $ 117 billion.

Apple had a 40% share of the US smartphone market in the fourth quarter of 2020. It also led the tablet industry, with a market share of 29.2% .67 And on November 12, 2020, Apple paid a quarterly dividend of 20.5 cents.

Johnson & Johnson (JNJ)

This New Jersey-based pharmaceutical and healthcare giant is known as a "dividend aristocrat." From at least 1973 to 2020, Johnson & Johnson increased the value of its cash dividends each year.

In 2020, it paid dividends of $ 3.98 per share, up from $ 3.75 per share in 2019. In the 10 years ended May 12, 2021, the adjusted performance of the stock division (not including dividends reinvested in cash) was of 157.24%.

Like many companies, Johnson & Johnson reduced the value of its dividends in 2021.

Dover (DOV)

This Chicago-based business focuses on fluid management, industrial products, and manufacturing support systems (not exactly the subject of dinner banter). However, Dover, like J&J, is a dividend powerhouse and has also increased its annual cash dividend every year from at least 1973 to 2020.

In 2020, Dover paid quarterly dividends totaling $ 1.97 per share, up from $ 1.94 in 2019.

As of May 12, 2021, the 10-year adjusted return to divide shares (not including cash dividends) was 372.39%

Microsoft (MSFT)

In 2019, Microsoft became the third company to achieve a market capitalization of more than $ 1 trillion. Co-founder Bill Gates is among the richest people in the world.

Under the leadership of CEO Satya Nadella, who was responsible for the company's cloud infrastructure and services business, Microsoft became less dependent on its Office software suite and the Windows operating system for revenue.

In the first quarter of fiscal 2021, the company's revenue from business cloud services increased 31% year-over-year.

Microsoft has also paid a quarterly dividend since the fourth quarter of fiscal 2004. In fiscal 2020, it paid a quarterly dividend of 51 cents per share.

The company paid a dividend of 56 cents per share for each of the first three quarters of fiscal 2021.

McDonald's (MCD)

McDonald's is by far the largest fast food chain in the United States by sales, with annual revenues nearly double that of its closest rival, Starbucks. It was the highest value fast food restaurant brand in the world in 2020, at $ 129.3 billion.

McDonald's has increased its total dividend payments every year since 1977. In 2020, its annual dividends totaled $ 5.04, up from $ 4.73 in 2019.

For the 10 years ended May 12, 2021, the total return on the shares, excluding reinvested dividends, was 194.13%. Including reinvested dividends, it was 267.41%.

Amazon.com (AMZN)

Amazon is the second largest retailer in the world by revenue, behind only Walmart. Its 2020 revenue totaled $ 232.88 billion. But like its rival Microsoft, Amazon increasingly relies on its cloud computing businesses to generate revenue and profit.

The average annual return on the stock from 2016 to 2020 was 38.93%. Amazon was the second company to reach a market capitalization of $ 1 trillion.

As of May 12, 2021, Amazon founder Jeff Bezos was the richest person in the world, with a net worth of $ 183.3 billion.

We hope you enjoy watching this video about stocks to buy 

Source: Let's Talk Money! with Joseph Hogue, CFA

 

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