Investing can be complicated. That’s especially true when putting money to work in fast-moving industries with rapidly changing product cycles. Sometimes, it’s nice to own long-term stocks that are good choices to buy and hold indefinitely. This has led to the rise of long-term stocks to buy.
These three picks are companies that have been in business for more than a century and are still going strong. By selling products that never go out of style, these firms tend to be resilient against both recessions and technological change. No investment comes without risk, but these three long-term stocks are among the most high-quality conservative holdings out there for investors that want to “set it and forget it”.
Johnson & Johnson (JNJ)
Johnson & Johnson (NYSE:JNJ) is a core holding for many long-term investors. And with good reason. It’s a perfect example of an easy-maintenance stock.
Johnson & Johnson has been in business since 1886 and nowadays sells an astounding array of products across the pharmaceutical and medical device spaces.
Johnson & Johnson has a decentralized organizational structure, with lower-level product managers and engineers getting a surprising amount of autonomy in decision-making. This has allowed J&J to continue to innovate and grow despite its massive size.
The company recently spun off its Kenvue (NYSE:KVUE) consumer products business. This gives Johnson & Johnson greater exposure to its existing businesses with higher growth prospects. After a sluggish 2022, J&J delivered excellent earnings this month, with its medical devices for surgeries unit showing particularly strong results.
McCormick (MKC)
McCormick (NYSE:MKC) is the dominant player in the U.S. spices and seasonings market.
It has an estimated 40-60% market share in its primary categories, coming in at more than double that of its nearest branded competitor. It also is a leading provider of spices for store brands. This creates the situation where consumers are often choosing between a McCormick spice and a generic alternative that McCormick also produces.
Having a quasi-monopoly on basic cooking ingredients makes for a good business. McCormick shares are up more than 8,000% over the past 40 years. McCormick’s vast supply chain and sourcing advantages are hard to compete with.
In recent years, McCormick has been broadening its reach. It now has a leading position in producing flavors and seasonings for restaurants and institutional kitchens. Furthermore, McCormick is making deals, such as its acquisitions including Frank’s and Cholula in the hot sauce space.
Long story short, spices and seasonings are nearly impossible to disrupt. Humans love tasty food and unique flavors. Sales should continue to grow as people demand more interesting flavors, along with benefitting from McCormick’s moves into additional product categories and various international markets.
Brown-Forman (BF.A)
Like spices, spirits are another thing that never goes out of style. Brown-Forman (NYSE:BF-A) (NYSE:BF-B) was founded in 1870. Remarkably enough, the Jack Daniels producer even managed to stay in business during the United States’ period of alcohol prohibition.
Brown-Forman’s long-term stock appeal is strong. People tend to be pretty set on their choices in alcoholic beverages. Jack Daniels is a resonant brand that has proven to hold weight with many generations of Americans over the decades. Increasingly, Jack Daniels is a global phenomenon as well, with Brown-Forman investing heavily in Latin America and other emerging markets to spread its reach.
In recent years, the company has branched out into other spirits as well, with its Casa Herradura tequila acquisition in 2007 looking particularly shrewd. Tequila has gone on to become a fast-growing spirit in the North American market, and one where premium and super-premium products are now gaining appeal.
The final element for the long-term story is ownership. The Brown family continues to control the company via ownership of the A-class shares which have voting rights. This protects the firm from outside suitors and allows it to continue compounding wealth for its shareholders on a generational level.
On the date of publication, Ian Bezek held a long position in BF-A, MKC, JNJ stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
