Dividend Stocks

3 Safe Stocks to Buy (and Never Sell)

Investors have good reason to be searching out the safest stocks for portfolio stability these days. The potential for dramatic economic disruption remains high despite a new federal debt ceiling agreement. There are no cuts to government spending — the rate of increase is only slowing. The debt ceiling, on the other hand, was raised by trillions of dollars for the next two years. Finding reliable stocks for a buy-and-hold strategy has never been more important.

Investors should look for for safe stocks with consistent returns. Companies that have been through market downturns and recessions and emerged stable and sturdy on the other side are excellent candidates. The following three stocks have proven track records and handsomely rewarded investors for almost a century or more.

American States Water (AWR)

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Primarily charged with providing clean water and electricity to Southern California, American States Water (NYSE:AWR) is a utility that has the longest record of raising its dividend of any other stock on the market. There’s a reason utilities were considered “widow-and-orphan stocks” as they were deemed stable investments that provided reliable revenue streams through all types of markets.

Founded a month after the stock market crash of 1929, the water utility has paid a dividend for 86 consecutive years. It has also increased the payout for 68 straight years. That makes it a Dividend King, or a stock that has raised its dividend for 50 years or more. Moreover, its total return more than quadrupled in value over the past decade, or twice that of the S&P 500

Today American States Water serves over 1 million customers across nine states and serves 11 military bases under 50-year contracts with the U.S. government. Its long-term recurring revenue stream makes this utility a top defensive stock for investors in times of economic turmoil.

PPG Industries (PPG)

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Paint and coatings specialist PPG Industries (NYSE:PPG) is another safe stock with consistent returns that has been rewarding investors for over 100 years. 

Founded in 1883, PPG began paying a dividend to shareholders 16 years later and never stopped. Just last month it made its 499th consecutive dividend payment. PPG has also reliably raised its payout for 51 consecutive years, making it a Dividend King as well.

Having been around for 140 years, PPG has been through every business cycle imaginable. Beyond depressions and recessions, it has seen two world wars, terrorist attacks and several global pandemics — yet still marches on. Housing booms such as the one we most recently experienced do tend to boost PPG’s bottom line. Yet busts like we may soon experience also provide opportunity. If people feel they can’t afford to move, they often choose to renovate and remodel their homes instead. Few things are as cheap as a coat of new paint to revive stale décor. 

The coatings leader is second only to Sherwin-Williams (NYSE:SHW) in terms of revenue. It owns such brands as Dulux, Glidden and Pittsburgh Paints, as well as Liquid Nails, Flood and Sico. It also owns Mexico’s largest paint supplier, Comex. PPG Industries is one of the safest stocks for portfolio stability amidst a worsening economy.

Exxon Mobil (XOM)

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We don’t hear much about “peak oil” anymore because advances in horizontal drilling and hydraulic fracturing allowed the industry to become awash in supply. It is why the U.S. is the world’s largest producer of oil, bigger than even Saudi Arabia or Russia. It’s also why energy stocks are among the safest stocks for portfolio stability.

Exxon Mobil (NYSE:XOM) is the world’s biggest, non-government-owned energy company. It is able to trace its roots back to 1870 and John D. Rockefeller’s Standard Oil Company. Although oil companies have not always been the best investments, due to boom-and-bust investment cycles, today’s oil stocks — particularly Exxon Mobil — are not the same as they were even a decade ago.

Over the past 10 years Exxon’s total return has doubled that of the broad market index. By narrowing its focus to financing only its most profitable projects in the most profitable regions, Exxon posted its best year for profits in its 135-year history, with earnings of $55.7 billion last year.

Although the U.S. is home to the largest percentage of Exxon’s assets, the oil and gas giant derives the vast majority of its profits from its international portfolio by a better than two-to-one margin. It trades at just 7 times trailing earnings, 11 times estimated profits and less than 10 times the free cash flow it produces.

Exxon pays a quarterly dividend of $0.91 per share. It has raised the payout for 40 consecutive years, making it a Dividend Aristocrat. Possessing some of the top assets and operations in the industry, Exxon remains one of the most reliable stocks for a buy-and-hold strategy.

On the date of publication, Rich Duprey held a LONG position in AWR, PPG and XOM stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express and numerous other news outlets.