It's always tempting to look for stocks you can simply buy and forget. Well-run businesses with a great brand, strong reputation, and stellar track record can allow you to compound your wealth over time. The key is to ensure you have the patience and fortitude to hold on to these winners through market cycles so that you can enjoy the fruits of your labor.
Companies you can keep forever are found in many different industries. A key characteristic is the ability to continue growing despite adversity. Some occupy a unique niche within their industry while others may have a track record of consistent and growing dividend payments.
Here are three prime candidates you can consider keeping for the long haul -- and even hand down to the next generation.
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Lululemon Athletica
If you've ever witnessed a group of people practicing yoga or pilates, chances are they will be wearing apparel designed by Lululemon Athletica (LULU -0.03%). The company is well-known for its "athleisure" wear that combines both athletics and leisure in one attractive package. Lululemon has demonstrated its resilience through the pandemic as it continued to grow its topline from $3.3 billion in its fiscal 2019 to $4.4 billion in 2021. Net income climbed during the period from $484 million to $589 million.
The sporting apparel company's strong run has continued into this year. For the first nine months of fiscal 2022, net revenue jumped 54.5% year over year to $4.1 billion while net income more than doubled to $540.8 million. The trend of healthy living coupled with more people telecommuting has led to sustained demand for Lululemon's products, and this momentum should carry on into the foreseeable future.
The company has also begun offering Mirror, its interactive home gym, at 40 of its stores in Canada. Acquired in July of last year, Mirror features both live and on-demand fitness and personal training classes across a variety of genres. CEO Calvin McDonald intends for this acquisition to strengthen the brand's connection with customers. With increased engagement, he hopes customers will remain loyal and spend more on the company's platform.
With both Mirror and its line of athleisure wear gaining traction, Lululemon looks set to continue its growth streak in the years ahead.
Coca-Cola Company
The Coca-Cola Company (KO 1.50%) needs no further introduction, being one of the largest beverage businesses in the world with products distributed and sold in some 200 countries. Aside from its signature cola brand, Coca-Cola also offers a broad range of beverages, including sports drinks, coffee, tea, and juices.
Its revenue has remained resilient in the past three years, dipping just slightly from $34.3 billion in 2018 to $33 billion in 2020. Net income, however, managed to climb from $6.4 billion to $7.7 billion over the same period. Coca-Cola is also a recognized Dividend King, having raised its annual dividend for 59 consecutive years to the current $1.68 per share.
The company's results for the first nine months of 2021 continue to demonstrate its dominance within the food and beverage sector with revenue rising 20% year over year to $29.2 billion and net income increasing 17% to $7.4 billion.
Investors can look forward to continued growth as Coca-Cola looks to acquire other businesses. Its most recent purchase of the remaining 85% stake in BodyArmor for $5.6 billion illustrates Coca-Cola's commitment to grow in the sports drink category. BodyArmor is the No. 2 sports drink within its category and has been growing at a rapid rate.
A combination of organic growth and opportunistic acquisitions such as BodyArmor should continue to propel Coca-Cola's earnings and dividends upwards.
Microsoft
Microsoft (MSFT 0.37%) stands head and shoulders above many other information technology competitors with its sheer breadth of products and services. The $2.5 trillion company is going from strength to strength as it latches onto tailwinds generated by the pandemic. For its fiscal 2021 ended June 30, total revenue increased 17.5% year over year to $168.1 billion while net income surged 38.4% to $61.3 billion.
The momentum has carried forward into fiscal 2022 as revenue powered on with a 22% year-over-year gain in the first quarter. Net income jumped 48% to $20.5 billion, driven by broad-based growth across its gaming, professional network, and cloud services divisions.
Microsoft is not content with just organic growth but is also augmenting that strategy with helpful acquisitions. The European Commission just approved the company's massive $19.7 billion purchase of Nuance Communications to extend its edge in healthcare and related industries. And just this week, the technology giant announced the acquisition of Xandr from AT&T. That purchase will help Microsoft boost its digital advertising division by leveraging Xandr's large-scale advertising platforms.
With their strong products and growth strategies, it is safe to say that Lululemon, Coca-Cola, and Microsoft all have the important attributes to be attractive, long-term buy-and-hold positions.
