With the market favoring riskier assets like cryptocurrency and artificial intelligence stocks, many investors may now look at dividend stocks and other value stocks as overly conservative bets. Sure, many dividend-paying stocks (and companies owning stocks paying dividends) may seem to be overly defensive picks right now. We’re seeing what the Nasdaq is doing, making new highs seemingly daily.
However, stability and growth are important for those looking to create true long-term wealth. In that context, finding stocks that provide safety and value is important to developing a well-diversified portfolio that can stand the test of time.
Here are three such long-term stocks I think are worth buying and holding for a decade or longer. These companies have stood the test of time and have solid growth prospects as well. Thus, they provide a mix of value, stability, and income (for two of the three) that should give market-beating total returns over the next decade. That’s my view at least.
Restaurant Brands (QSR)
In Q4 2023, Restaurant Brands (NYSE:QSR) surprised investors with solid earnings that shot past revenue and earnings expectations. The fast food giant’s revenue grew 8% year-over-year to $1.83 billion, driven mainly by the company’s Popeye’s and Burger King banners. Renovations, strategic acquisitions and menu innovations also played a role. However, the company’s stalwart status as the owner of four iconic franchises (Tim Horton’s and Firehouse Subs as well) makes this company among the most defensive stocks to buy in the market.
That’s mostly because we all need to eat, and many consumers may down-shift to quick-service restaurants if the going gets tough. Fast food chains have held up remarkably well in previous crises, often gaining during these rough periods. So, Restaurant Brands is a solid pick to consider for those who foresee economic turmoil on the horizon.
Additionally, the fast-food conglomerate recently unveiled its five-year plan. This plan includes an expansion to a whopping 40,000 locations and $60 billion in total sales as its goals by 2028. The Toronto-based company has continued to push forward to grow its business, aiming to increase its footprint by around 5% per year. In addition to an expected same-store sales bump of around 3% per year, this should lead to solid growth in the long term.
When factoring in the company’s international expansion plans, stable cash flows, and a dividend yield of nearly 3%, it’s a stock to buy and hold onto forever.
Berkshire Hathaway (BRK-A, BRK-B)
Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) shareholders can use Warren Buffett’s shareholder letters as one of their most effective learning resources. I certainly do. The Oracle of Omaha has created one of the world’s best business portfolios under the Berkshire Hathaway banner. He’s also put together a world-class team that can drive this business forward when he eventually passes (he’s 93, after all)
For investors who bought Berkshire Class A stock in the middle of the 1960s, returns of nearly 5,000,000% would have been accrued over 75 years. Of course, most of us don’t invest for this long – we need to pull out our money at some point. But the reality of his investment strategy is time-tested and simple. Buy high-quality companies for less than they’re worth and hold for very long stretches of time.
HIs portfolio has continued to perform well, relative to most benchmarks, but has underperformed in recent years during previous bull runs. That said, BRK-B stock was among the best-performing stocks on most indices during previous crises.
Again, for those looking to take a truly long-term view of their investments, this is a stock to hold onto for as long as possible.
Coca-Cola (KO)
Coca-Cola (NYSE:KO) is a world-class beverage brand that’s been around for more than a century. The company has transformed into a giant that fully dominates the non-alcoholic beverage market globally, with a global market share of more than 45%. Organic sales growth of 12% indicates that Coca-Cola could actually (surprisingly) continue to gain share, something many investors may not have thought possible given its size.
The company’s 3.2% yielding stock continues to hover in a relatively range-bound state, at least it has over the past five years. However, the company has also continued to increase its dividend payout, creating one of the best bond proxies the market has ever seen. The company has been growing its distributions for an impressive 62 years.
A company that brought in more than $45 billion in revenue last year, Coca-Cola trades around 25-times earnings and 6-times sales, reasonable multiples for a company of its size. Notably, this is also one of Warren Buffett’s long-time holdings. Enough said.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
