Identifying strong stocks to buy and hold for the long haul can be challenging in a capitalist market. Many of today’s largest companies have reshaped industries and generated immense returns for long-term investors on the way. For reference, take Nvidia (NASDAQ:NVDA), founded over 30 years ago in 1993, leading the Artificial Intelligence (AI) boom. So, investors seeking rock-solid stocks to buy and hold are best served to avoid short-term fads and favor companies with proven business models generating profits over time.
Despite only 10% of the 1955 Fortune 500 still being in a recognizable form today, some companies have consistently built lasting businesses and fortunes. The secret has been strategic adaptation and leadership in industries positioned for long-term growth. As the average tenure of companies on that list decreases, such characteristics may allow businesses to continue delivering shareholder value for years. This should provide ballast for investors’ portfolios seeking stocks to buy and hold forever.
Three stocks with attributes that make them rock-solid candidates to buy and hold forever include:
JPMorgan Chase (JPM)
Although future performance is not guaranteed, JPMorgan (NYSE:JPM) has stood the test of time. It withstood the “Great Recession” in the wake of the subprime crisis, but also existed before the Federal Reserve. It even goes as far back as George Washington’s years. As one of the world’s largest and most stable banks, JPM is considered one of the blue-chip stocks to buy and hold for the long run. It simply is systemically “too big to fail” in popular parlance.
Today’s CEO, Jamie Dimon, is notoriously cautious, worrying about the state of the U.S. economy. He has squirreled away $40 billion in reserves over the last year and a half to build up a record $328 billion in financial backing. Most recently, he took advantage of the 2023 banking crisis to snap up new assets, such as First Republic Bank (NYSE:FRC).
The bank has also managed a 2% dividend yield over the last ten years and trades at a price-to-earnings (P/E) ratio of 11.6x and a dividend yield of 2.4%. This makes JPM one of the stable stocks to buy and hold for investors seeking steady returns.
Home Depot (HD)
Home Depot (NYSE:HD) has established itself as a leading home improvement and construction firm over the last decade. The company has managed a fairly consistent dividend yield of around 2% over that period despite its share price more than quadrupling.
Besides its strong history, there are reasons to remain optimistic that Home Depot is one of the stocks to buy and hold forever. One important reason is that the underinvestment trend in U.S. housing will likely continue, with a yawning supply and demand gap driving up home prices. As the average age of U.S. homes rose to 40 years, aging buildings signal a major home renovation boom on the horizon.
Recently, high interest rates and low housing turnover have weighed on the company’s earnings. Nonetheless, Home Depot still trades at a P/E ratio of 22.1x and maintains a dividend yield of 2.7%. If the Fed acts to lower interest rates, supporting a recovery in home demand, Home Depot could be the perfect candidate in a list of stocks to buy and hold for long-term exposure to the home improvement sector.
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG) is one of the top candidates for stocks to buy and hold for long-term investors who seek consistent dividend growth. The consumer products giant has a proven track record of increasing its dividend for over 20 consecutive years, including during economic downturns such as the subprime mortgage crisis. With essential consumer product needs unlikely to decline significantly in coming decades, P&G’s portfolio of trusted brands positions it well for steady performance.
The company might benefit from the trend supporting home improvement retailers such as Home Depot, as households require cleaning and maintenance products to care for. Although PG trades at a P/E ratio comparable to the S&P 500 index, it stands out with a good dividend yield of 2.5% for reliable income generation.
With increasing revenue growth over the past decade, PG can deliver both capital appreciation and dividend growth potential. This makes it a worthwhile candidate for stocks to buy and hold forever.
On the date of publication, Stavros Tousios did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.