Food can be a language of love and often carries cultural significance in society. The flavors of food define it, and besides, nobody enjoys bland food!
This may explain how spice and condiment company McCormick & Company (MKC 1.68%) has done so well over the years. Walk down the spices aisle in your grocery store, and you will be amazed at how many brands are owned by McCormick -- from Frank's Red Hot to Old Bay, Lawry's, and of course, McCormick-branded spices.
It's hard to find investments that you can genuinely stow away and "forget" about. However, McCormick might top the list if I had to pick one company to own for the next 100 years. Here's why you should never go broke owning the stock.
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1. Recession-proof business
McCormick is in a win-win as arguably the most dominant spices company in the world. It dominates the retail market with products packed into every grocery store while also selling commercially to restaurants. Whether people are eating out when the economy is strong or cooking at home during more challenging times, McCormick is there to sell its products.
MKC Revenue (TTM) data by YCharts
You can see in the chart above how revenue has steadily climbed over decades, with little disruption along the way, thriving throughout multiple recessions. The business is also profitable with net income, the company's bottom line, following along.
McCormick's revenue has grown an average of 5% to 6% per year over the past decade, which won't blow you away, but it's a steady grower that can slowly compound over multi-decade holding periods. The company gives its profits to shareholders by repurchasing shares, paying a dividend, or making the occasional acquisition to create growth.
2. A safe and growing dividend
It can be hard to be patient enough to hold a stock for many years, but McCormick pays you to own shares. It's a Dividend Aristocrat, a company that's increased its dividend for 25 years or more -- or 36 years in McCormick's case.
You can see the company's slow and steady dividend increases in the chart below. In other words, McCormick is the tortoise, not the hare -- but as they say, slow and steady often wins the race. Investors who buy shares today will get a dividend yield of 1.4%, which isn't the highest, but certainly beats a savings account.
MKC Dividend data by YCharts
Even though McCormick has raised its dividend 36 times in a row, there is still plenty of room for it to keep going. The company's dividend payout ratio is still over 49%, meaning that half of the profits go to shareholders as dividends. The other half goes back into the business for share repurchases or the balance sheet.
Investor takeaway
Sometimes, simple is better. McCormick's collection of solid brands, dominant place on grocery store shelves, and long track record of steady execution make the company a long-term gem for shareholders that's beaten the S&P 500 by a wide margin over decades.
If you're looking for a stock that you can buy and check on once in a "blue moon," McCormick can fit that bill nicely. Consider a dollar-cost averaging strategy to slowly and steadily build a position and let it build wealth for you.
