AstraZeneca plc isn't the only dividend stock I'd hold for the next decade

Today I'm looking at two stocks I'd be happy to tuck away and forget for the next decade, regardless of any market corrections or economic worries.

Unstoppable long-term growth?

If I had to choose a single sector of the market to grow over the next decade, I'd probably choose pharmaceuticals. Ageing populations in developed countries, plus growing personal wealth in emerging markets, must surely mean that demand for medicine will grow.

This week's results from FTSE 100 pharma giant AstraZeneca (LSE: AZN) appeared to support this view. The group reported "strong growth in China," where sales are expected to rise by more than 20% this year.

Not quite there yet

The long-term future may be bright, but AstraZeneca isn't quite there yet. Falling sales of older products meant that revenue at the Anglo-Swedish firm fell by 2% last year. The company's preferred core measure of earnings also fell by 2%, to $4.28 per share.

The group's painful transition is expected to continue in 2018. Core earnings should fall by around 20% to $3.30-$3.50 per share this year, as patent expiries continue to hit profits.

"Completely on track"

Chief executive Pascal Soriot maintains that the group is still "completely on track" to hit its growth targets for the next five years. If he's right, then revenue should rise from $22.5bn to more than $40bn by 2023.

Such a gain should transform the group's profits and could lead to big gains for shareholders. In the meantime, Mr Soriot has reiterated the group's commitment to the dividend, which was left unchanged at $2.80 per share.

Despite the short-term uncertainty, I think AstraZeneca's 4.1% yield and long-term growth remain attractive for patient investors.

A proven performer

2017 was a tough year for specialist insurance companies such as Beazley (LSE: BEZ), which were hit by high levels of property damage claims following hurricanes Harvey, Irma and Maria.

Wildfires in California didn't help matters either, and the group was forced to issue a profit warning in September.

However, disaster claims are part of the usual business of specialist insurers and often provide buying opportunities for savvy investors. Today's full-year results show why. Although pre-tax profit fell by 43% to $168m last year, the group still managed to squeeze out a small profit from its underwriting operations, and enjoyed a big increase in investment income.

The company was also able to release $203.9m of reserves from the previous year, helping to cushion the impact of higher claims payouts.

Double-digit growth

For insurance companies, the reality is that high levels of claims make it easier to increase renewal prices.

The group's gross written premiums rose by 7% to $2,343.8m last year, but chief executive Andrew Horton sees "potential for double digit growth" in 2018, when earnings are expected to double.

The shares currently trade on a 2018 forecast P/E of 16.8 with a prospective yield of 2.7%. I believe the prospects for further growth are good, especially as shareholder returns have often been boosted by special dividends in quieter years. I'd rate this as a buy-and-hold stock for the next decade.

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Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended AstraZeneca. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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