The stock market is at an odd juncture right now. 2022 was a tough, bear market and 2023 had plenty of doom-and-gloom at the start — yet US markets continue to trade pretty well. With many stocks still down big from the highs though, it’s got investors looking for stocks to buy and hold forever.
Put simply, they want stocks to buy for the long term that they can count on year-in and year-out. Whether there’s high-inflation, deep recessions, a debt-ceiling crisis or otherwise.
When you’re investing, you’re buying part of a company. It being a multi-billion-dollar (or even trillion-dollar) company doesn’t matter. You only owning a handful of shares when there is a billion (or more) shares outstanding doesn’t matter. The goal is the same no matter where you fall.
In either case, we’re looking for long-term stocks to buy.
Johnson & Johnson (JNJ)
I can’t say enough good things about Johnson & Johnson (NYSE:JNJ). The company has been so consistent over the years that it’s become a name investors can trust. I have stated my case about J&J many times over the last two months or so and the recently updated information gives me very little reason to change that stance.
The company recently reported its quarterly results, beating earnings and revenue expectations. Further, the company raised its full-year outlook for both measures (with the midpoint of both outlooks topping analysts’ expectations).
Amid that earnings report, Johnson & Johnson raised its dividend payment for the 61st consecutive year. More than six decades of annual increases speak to not only the business, but the culture that management has instilled at the top.
Analysts call for modest but consistent growth this year and next year, but that’s hardly the point. Instead, it’s that investors can buy this name for roughly 15 times earnings, getting a bargain for its consistency in the process.
Microsoft (MSFT)
When you’re looking for stocks to buy and hold forever, it’s always a little scary to pick a tech name. However, I think Microsoft (NASDAQ:MSFT) fits the bill here. The firm went public 37 years ago in 1986. For a tech company, that’s a long lifespan.
In that stretch, Microsoft has grown into a $2.2 trillion behemoth and with the way it continues to position itself, it should remain relevant for many years to come. While its pursuit of Activision Blizzard (NASDAQ:ATVI) may not work out, the company still has the enterprise and PC market, cloud, and now likely AI.
CEO Satya Nadella is intent on hitting the AI trend and given that that’s the next revolution in tech, it bodes quite well for Microsoft.
That all said, Microsoft did have a period of irrelevance. After hitting an all-time high in 1999, it didn’t do so again until 2016. It was a unique circumstance and Microsoft eventually found its groove, but that is always a risk to keep in mind with buy and hold stocks.
Starbucks (SBUX)
There are a lot of stocks we could include on this list, but I think Starbucks (NASDAQ:SBUX) deserves a spot. Starbucks is the youngest public company on the list, having gone public just over 30 years ago. However, that doesn’t make it undependable.
Even in the midst of the Covid-19 pandemic, customers were still wrapping around the drive-through lines to get their daily Starbucks coffee. The company is a juggernaut and a cash cow, winning over young and old consumers alike. For this reason, its popularity should continue long into the future.
Its dividend has been a focus in recent years, with the company having raised its payouts for a dozen straight years. With a five-year growth rate of more than 13.15%, it’s clear that its focus remains on the dividend as well. After the debacle of Luckin Coffee, it’s also clear that Starbucks should also keep a strong grip in the Chinese coffee and beverage market as well.
In the end, I expect Starbucks will keep chugging along and cash will keep flowing well into the future.
On the date of publication, Bret Kenwell held a long position in JNJ. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.