3 stocks that should pay you for the next 50 years
Investing is all about saving for the future, putting money away today so that you can retire comfortably when the time comes.
However, saving for retirement isn’t easy. A lot can change in 50 years, and finding the companies today, that will still be around decades from now is difficult.
Still, a long-term buy-and-hold strategy is worth pursuing because it can pay off in a big way if you get it right. Here are three companies that I believe will still be around in 2068.
Consumer goods
Dairy Crest Group(LSE: DCG) tops my list because this business has already been operating for nearly 40 years, although in one way or another, the company, which was the marketing arm of the UK’s Milk Marketing Board, has been around since 1933.
I believe this is just the start of the Dairy Crest story. The firm’s Cathedral City brand is one of the most popular consumer brands in the UK, and sales are growing. Meanwhile, the company’s cooking spray and infant formula business provides an excellent hedge against volatile milk prices.
Dairy Crest has a stable of products that are change-resistant. As long as people keep eating cheese, cooking food and feeding babies, Dairy Crest should continue to prosper. The shares yield 4.9% and change hands at 12.8 times forward earnings.
Death and taxes
They say there are only two certainties in life: death and taxes. So if you’re looking for a long-term buy, investing in one of these trends certainly makes a lot of sense.
Dignity (LSE: DTY) is an excellent play on the former. The largest, and only publicly listed, funeral provider in the UK, Dignity offers size and scale that no other company can match.
The firm is currently trying to cope with a wave of bad publicity regarding its pricing policies but management has acted to stem the issues. It introduced a low-cost alternative and is planning to invest £50m over the next three years to deliver £8m of annualised additional underlying operating profit by 2021. Despite having already rolled out the lower price options to customers, Dignity’s revenues rose during the first half.
As long as the company does not overstretch itself, Dignity should continue to produce returns for investors for decades to come. Trading on a forward P/E of 14 and yielding 2.4%, the stock does not look too pricey either.
Self-storage
My final buy for the next five decades is self-storage company Big Yellow Group(LSE: BYG).
Big Yellow has built a robust business model. Properties are located in highly attractive positions, specifically in urban areas with excellent transport connections. They’re also large billboards for the business, which cuts down on marketing costs.
What I like about this business is its property estate. The company has 57 Big Yellow self-storage centres, on which it owns the freehold across London, the South East and large metropolitan cities. This works out at around 78% of its property portfolio.
These properties are an insurance policy for the group. If the self-storage business does not work out, Big Yellow can always sell or let its properties to developers or other companies. With most of the portfolio located in built-up areas, demand will be high. I’m confident the firm will be around, in one form or another 50 years from now. It currently yields 3.7%.
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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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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