Long Term Stock Plays

Posted by dfaulkne on April 16, 2010 (05:23PM)

Hi,

Say you had 4-5k to invest in 4-5 different stock over the next few months. The goal is to find solid, depenable dividend paying stocks that are nearly garuanteed to be solid investments over a LONG time period (25-30 years). What are the best stocks that you would add to your portfolio, enroll in a DRIP plan, and never worry about again?

I already have a number of holdings but want to add 4-5 more that are "safer". Some I'm considering are.....

-MO (Altria)

-PEP (PepsiCo)

-CTL (CenturyTel, although not sure about the longevity of their current dividend yield)

-PM (Phillip Morris)

-ADP (Automatic Data Processing)

-PGN (Progress Energy)

Interested in hearing some more opinions.....

Posted by Mobywhite on April 16, 2010 (11:05PM)

I like all of those picks but Altira. The rest of the world is catching up to the U.S. attitude of smoking. I don't think that is a put-away-and-forget-about-it stock.

That time frame makes me think about things with finite resources that are and will stay in demand. Also, of industries where there are huge barriers to entry.

Check out:

KMP - it's a stock I used to own.

VZ pays a nice dividend, is reasonably priced and has a near duopoly with AT&T.

CVX only pays 3.4% but oil is going higher. Google Peak Oil if you are not familiar with that theory.

Look at the oil sands companies in Canada. SU and CVE are the biggest and I own both. Both pay a decent dividend and I believe are a no-brainer for nice appreciation. The really annoying thing is the Canadian government does steal, I mean tax, 15% of all dividend income which is really annoying.

Another theme you could play is agriculture. It will be my next big research project. There are more than one billion poeple entering the middle class around the world in the next 20-25 years. They will buy cars (oil, metals, energy - I own TTM in several accounts), they will buy larger houses (wood, metal, energy), and they will eat more meat (easy is YUM and MCD for their massive Asian growth) . It's the meat and agriculture that I have yet to really look at but there will be a massive demand for it.

Posted by OldFart on April 16, 2010 (11:10PM)

Mobywhite said - "I like all of those picks but Altira. The rest of the world is catching up to the U.S. attitude of smoking. I don't think that is a put-away-and-forget-about-it stock."

Altria - MO is purely a domestic business, the international operations are handled by PM

Posted by Mobywhite on April 16, 2010 (11:18PM)

Thanks OldFart, I didn't know that.

Posted by El Dorado on April 16, 2010 (11:51PM)

"Altria - MO is purely a domestic business, the international operations are handled by PM"

PM sure doesn’t have a problem getting involved with domestic politics, just ask the Native Americans.

Posted by OldFart on April 17, 2010 (12:02AM)

Most probably that was before the split. PM is based in Switzerland, the last time I was there (long time ago) there were no Native Americans around :-)

Posted by Honest Mike on April 17, 2010 (07:57PM)

I like MO and its dividends! (I own MO)

Posted by CorporateRaider on April 17, 2010 (11:04PM)

AT&T. Also, research Master Limited Partnerships (MLPs) and certain Real Estate Investment Trusts (REITS), and consider the tax implications for your personal circumstances for both of these investment vehicles.

Posted by Janosik on April 18, 2010 (10:57AM)

Regarding REITs, I'm holding AGNC right now. Pretty decent dividend, and the stock value seems pretty stable (hasn't been around that long, though). I also like AOD (previously held but waiting for a better entry point to get back in), which is a dividend generating fund - it is a risky play that you'll probably want to avoid.

I would caution against the buy, hold and never worry again mentality. I thought I could treat my 401k in this manner - that didn't work out so well. Now, I do a quarterly checkup on the 401k funds and at least rebalance.

I know Cramer seems like a crazy guy jumping around and slapping buttons, but I agree with his mantra of "buy and homework".

Happy Trading!

Posted by Stevie B on April 18, 2010 (06:39PM)

UPS has been very good to me this year, if jobs numbers and the consumer continue to get better I think it'll be $80 by EOY. For a long play ultimately the consumer will come back and the population will grow so I don't think you could go wrong with UPS. Plus they pay a 3 1/2% div.

Posted by Igess on April 18, 2010 (10:38PM)

My fav is Nestle (NSRGY). I don't know that it has a drip plan though. Broker can reinvest dividends automatically however.

Also have SYY for its good dividend history, and my guess of its continued good business prospects -- somebody's got to deliver food products to restaurants, hotels, etc.

Consider buying a utility --- gas, electric, water -- one that's local to you and that you write a check to each month. The idea is you pay them, they pay you. And being local, and holding the stock for years, eventually you should become knowledgeable with the company and its prospects. I'm doing this with my local water/elect/gas companies.

I'm partial to the food companies because they can expand in the emerging markets. So I hold WMT, PEP, DEO. Also PM. These companies for me for a 25 year hold. Assuming I might live that long.

Posted by dfaulkne on April 23, 2010 (02:22PM)

Great insight everyone, thanks for your responses.....

I have a number on my watch list....now, its just a matter of determining what to buy and when....it sure wouldn't hurt to have the market go down for a few months so I can get in with a few stocks, and then climb steadily for, oh i don't know, the next 35 years....haha.

Posted by buynhold on April 23, 2010 (03:23PM)

CSA (Cogdell Spencer) is a REIT that has been good to me over the past half a year or so. They pay a nice dividend (about 5%), and have been steadily going up in share price. Still well off their historic highs.

Posted by Albatross on September 14, 2010 (04:15AM)

I recently purchased T (AT&T), CTL (CenturyLink) and COP (ConocoPhillips). My goal is about the same as yours, to purchase stocks with decent dividend yields and enroll in a DRIP.

I was looking at SeaDrill (SDRL), it looks pretty solid. Anyone have any insight on this stock?

Posted by TampaJake on September 14, 2010 (05:39PM)

For your criteria I will throw out one name: Eli Lilly (LLY)
Has never cut the dividend over the last 5 years, has increased the dividend several times.

Currently trading at 35.65
One year low: 32.02
One year high: 38.00
5 year low: 27.21
5 year high: 61.00

Pays $.55 dividend per quarter (currently 6.17%) and you can sell calls against the stock if you so desire.

Posted by Minion on September 14, 2010 (06:45PM)

I'll be the contrarian: cash and cash equivalents, if you are not in the mood to play the down side. :)

Posted by ryansutes on October 17, 2010 (02:17PM)

A lot of these suggestions can be found on a Dividend Aristocrat list. These are companies that increase their dividend every year for the last 25 years. If you've been able to do that for the last 25, it will likely bode well for the next 25. Certainly, not all names on that list are great buys, but it is a good place to start. Try going to Seekingalpha.com and researching articles by dividend investors. Lots of solid suggestions that you are looking for.

I'll give a suggestion that I own.

DIS (disney) bought it for my daughter at $24, plan on giving it to her when she turns 21. DRIP is in place as well.

And an unusual suggestion.

C, BAC, JPM The government has shown they wont let them fail, dividends anticipated to return shortly (JPM probably soonest). The housing bubble will be a blip on a 25 year outlook.

Disclosure: I currently have a bid in to buy C and JPM

Good luck,

Ryan

Posted by spshapiro on October 17, 2010 (02:40PM)

I have a lot more confidence in JPM than C. If C can restore itself to its former 'glory' the rise will be greater than JPM, but in the latter's case the question is not 'if' but 'when'.

Posted by TampaJake on October 17, 2010 (05:54PM)

I wonder why anyone hasn't mentioned AGNC which is a fave of a lot of dividend investors. Could be that the track record is not that long?

LLY that I recommended earlier is up $2.11 from $35.65 since 9/14. Making new high ground, but then a lot of stocks are up in this recent bull run. Proceed with caution everyone.

Long Term Stock Plays

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