Yes, "forever" is an awfully long commitment. Most people have eventually sold stock they've bought, whether the holding period was years, weeks, or even hours. It's rare to find a gem that's worth hanging on to forever.
Although there aren't a lot of stocks that are potentially eternal winners, I think this pair falls into that very limited category -- mighty tech titan Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), and powerful, multi-tentacled manufacturer 3M (NYSE:MMM).
We can't be certain what the tech world has in store for us in the distant future. But whatever it does, we can be sure that Alphabet -- the parent company of Google and a raft of other tech enterprises -- is going to be an important part of it. After all, the company is a massive, ever-growing conglomerate busy developing a wide variety of software and hardware technologies.
Underpinning this is the company's immense lead in search -- Google has a breathtaking 80%-plus of the global market for desktop search, according to data from NetMarketShare.com.
This appears unassailable; even big, wealthy Microsoft can't come close with its Bing search engine (7.5% market share, says NetMarketShare.com). At this point Google is a nearly unavoidable destination for advertisers that want a presence in search, so the money keeps rolling in and will continue to do so.
With this very sturdy revenue foundation, Alphabet has branched out into nearly every software and hardware category imaginable.
It created and continues to develop the Android operating system, which has a market share of 85% as of the most recent published data from IDC (Alphabet also makes phones, by the way). Its Waymo unit is a leader in the drive toward autonomous vehicles. At one point, it even owned a company that does pioneering work in the -- shall we say highly specialized -- field of robotic animals.
Alphabet has achieved a nice balance of being a highly profitable, cash-generating company, and restless innovator looking for the Next Big Thing. It's well poised to maintain its dominance over search while researching and experimenting its way into new corners of tech. It will continue to be an excellent stock bet in the sector.
3M is the longtime poster boy for a successful, sprawling industrial conglomerate. Roughly analogous to Google, it has its fingers in a great many product niches and technologies. Its components and finished goods cover numerous business sectors such as tech, consumer goods, heavy industry, and healthcare to name only a few.
As an immense global enterprise with a long history behind it, 3M has been a slow, steady grower for the most part.
But there are times when parts of its business really click and the company surges ahead. Its Q3 was one of those occasions, with both revenue and net income rising nicely for a company of its size -- the former increased by 6% on a year-over-year basis to $8.2 billion, and the latter grew by 8% to $1.4 billion. Both convincingly beat the average analyst estimates, and net profit guidance for the year was raised.
Much of this recent success can be attributed to the performance of 3M's electronics and energy segment, the sales for which increased by 13%. The company's concentration on good segment opportunities such as data centers and automotive solutions paid off; this is clearly an enterprise that knows how to identify then fill a need in a lucrative business.
Because it's smart and efficient, 3M has consistently generated a lot of cash meaning it can usually execute share buybacks and dividends. In fact, it's managed to raise its dividend every year for nearly 60 years straight, a feat that has been topped by only a few companies on the exchange.
3M is a clever, well-managed business that will always be near the forefront of industry and technology while it makes coin from other sectors. On top of that, it has a steady and reliable dividend. In sum, this is a classic set-it-and-forget-it investment.
No investment, of course, is 100% guaranteed to produce a long-term return for its owner. But these two beauties are proven winners, and obvious candidates to continue their long victory laps -- while making their owners steadily wealthier in the process
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool recommends 3M. The Motley Fool has a disclosure policy.