Todayâs pick has a solidly boring business model that should keep investors in the black for decades to come.
This is Part 1 of Samuel Taube’s series on two stocks to hold forever. Today’s pick has a solidly boring business model that should keep investors in the black for decades to come.
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Two Stocks to Hold Forever
By Samuel Taube
Written Aug. 14, 2019
Sometimes the stock market can really toy with our emotions. Especially when it whipsaws between all-time highs and spectacular losses, like it has over the last month.
On July 10, the S&P 500 topped 3,000 for the first time in its history, representing a gain of more than 342% from its 2009 lows.
Less than two weeks later, the market was shaken by tighter-than-expected Fed policy and escalations in the U.S.-China trade war — and the index fell almost 6% in the span of a week.
[stocks to hold forever, crash]
In times like these, it would be nice to have investments that you’d never be tempted to prematurely sell. Holdings that you just wouldn’t worry about, through feast and famine.
Obviously, no investment with a positive real return is perfectly safe. But certain stocks are pretty darn close.
The Multi-Armed $0.30 Pot Stock to Buy Now
The cannabis industry is currently valued at $9.2 billion and is expected to rise over $47 billion over the next few years.
Cannabis is 100% legal in Canada. And now legalization is spreading like wildfire across the United States.
When it comes to investing in pot stocks, picking the right one is crucial.
Luckily, investment director Alex Koyfman has discovered the perfect pot stock... for under $0.30 a share!
This company is a multi-armed beast, participating in a multitude of markets, from infrastructure to food to technology. Here are just a few things this company’s involved in:
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It has a 1,000-acre deal in Nevada where farmers can make more than $1,000,000 per acre.
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It has a large interest in 40,000 square feet worth of indoor growing facilities in California.
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It’s developing its own line of cannabis-infused soft drinks, a $200 billion industry that even Coca-Cola is about to get in on.
â¨This company could see revenue increase over 3,000%! This is your chance to pick this up at $0.30. Don’t miss the boat...
[Click here now to get all the details.](
Over the last week, our research team has been debating which stocks those are. More specifically, we’ve been asking each other the question, “If you had to buy one stock that you couldn’t sell for 30 years, what would you buy?”
In this two-part series, we’re going to highlight two very different stocks that were both popular answers.
These two companies have almost nothing in common when it comes to their products, industries, and business models. But what they do have in common is a position in the market that should be safe for at least three decades.
Today’s company deserves an introduction from one of the 20th century’s greatest thinkers:
Do you realize that toilet paper has not changed in my lifetime? It's just paper on a cardboard roll, that's it. And in ten thousand years, it will still be exactly the same because really, what else can they do?
— George Costanza, Seinfeld
Really, What Else Can They Do?
We’re talking about Kimberly-Clark (NYSE: KMB). And George has a point. Toilet paper is toilet paper; it’s hard to find a better example of a boring staple everyone needs. People buy and use the same amount of it whether the economy is growing, shrinking, or going sideways.
With that in mind, it’s not surprising that Kimberly-Clark’s revenues have steadily grown at a faster rate than inflation or population growth. They’ve quadrupled over the last 30 years, and they’re likely to do the same over the next 30 years.
[stocks to hold forever, kmb revenue]
Kimberly-Clark owns three of the top 10 brands of paper products in the U.S.: Scott, Kleenex, and Cottonelle.
Only Procter & Gamble has a larger domestic market share. (Procter & Gamble also has substantial interests in riskier industries like pharmaceuticals, so it’s less useful as a play on staple paper product demand.)
But Kimberly-Clark’s business model isn’t even the main reason I’d buy it with a 30-year lockup period.
Three Stocks to Play This $12 Trillion Investment Opportunity
Right now, 5G is taking the world by storm.
And within the next few years, it’s expected to create a $12 trillion tsunami of cash.
Investors who position themselves properly stand to become millionaires.
[Here are three stocks to get you started.](
Decades of Dividend Raises
That would be Kimberly-Clark’s 47-year history of steady dividend increases. It’s one of the oldest and most stable dividend aristocrats.
The company’s dividend currently stands at $1.03 per share. That equates to a 2.93% yield at the time of writing.
But what really makes Kimberly-Clark special among the aristocrats isn’t the size of its dividend — it’s the safety of its dividend.
As you can see in the graph below, Kimberly-Clark’s dividend per share has only exceeded earnings per share one time in the mid-1990s. That’s the only occasion on which it has ever been in danger of cutting or failing to raise its dividend.
[stocks to hold forever, kmb payout]
Given the safety and steady growth rate of Kimberly-Clark’s dividend, it’s a great stock to hold with a dividend reinvestment plan (DRIP).
Over the last 30 years, the price of Kimberly-Clark stock has appreciated by 764.9%. But when you factor in reinvested dividends, that return shoots up to 2,130%!
[stocks to hold forever, kmb total return]
George Costanza’s toilet paper monologue from Seinfeld wasn’t particularly tactful, but it wasn’t wrong. Given the steady demand for those paper-and-cardboard rolls — and their unchanging nature — toilet paper is a great industry to invest in for the long term.
And Kimberly-Clark’s commanding market position, multi-brand business model, and safe, ever-rising dividend make it the perfect toilet paper producer to hold for the next 30 years.
Editor's Note: Looking for more safe investments that provide rising income? [Check out The Wealth Advisory.](
You can check out Part 2 of our “Two Stocks to Hold Forever” series [right here](. I won’t give away the next pick, but I’ll give you a hint.
The company has absolutely nothing to do with toilet paper. But you could make one of its most recognizable logos out of one big roll and two smaller rolls.
Until next time,
[samuel taube, signature]
Samuel Taube
Editor's Note: This article originally appeared on our sister site, Wealth Daily.
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