It's surprising how easy it can be to build up a robust investment portfolio for your retirement. All you need to do is hunt for companies you feel comfortable owning over the long term. Such businesses should possess a strong franchise or brand, be staffed by capable and competent management and be blessed with tailwinds that allow them to sustain revenue and profit growth over decades.
Of course, patience is the key to enjoying the magic of compounding. Once you have identified and purchased these stocks, all that's needed for them to grow your wealth is time. As you go along, you can choose to add more of these dependable stocks while also reinvesting any excess cash or dividends into the very same names.
Here are three stocks you can safely tuck away in your investment portfolio for the rest of your life.
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Mondelez International
If you are yearning for a tasty snack, look no further than Mondelez International's (MDLZ +0.05%) portfolio of products. The food company owns global such brands as Oreo, Cadbury, and Toblerone and holds either a pole position or a No. 2 position in such snack segments as biscuit, chocolate, and candy. Mondelez was renamed after Kraft Foods spun off Kraft Foods Group back in October 2012, and has steadily increased its quarterly dividend from $0.13 per share in 2013 to $0.35 this year.
NASDAQ: MDLZ
Key Data Points
Earnings-wise, Mondelez has also proven its resilience. Although net revenue remained flat at around $25.9 billion from 2017 to 2019, net income rose from $2.8 billion to $3.9 billion over the period. 2020 saw a dip in net income due to the effects of the pandemic, but the company saw a sharp rebound last year with net income hitting $4.3 billion, up 21% year over year. Additionally, the company generated copious amounts of free cash flow in the last five years, which has enabled it to steadily increase its dividend payments.
Mondelez is also gearing up for continued growth through acquisitions. Last year, the snacks company announced the acquisition of Chipita S.A., a European snacking company that specializes in croissants and baked rolls. The purchase price of around $2 billion will allow Mondelez to derive economies of scale in procurement and manufacturing, and also opens up opportunities to grow in the central and eastern European region. Mondelez also took a majority stake in Grenade, which manufactures high-protein bars, and will help to boost its snack bars division.
Home Depot
Home Depot (HD 0.78%) is the world's largest home-improvement retailer with 2,317 retail outlets located in 50 states in the U.S. as well as countries such as Mexico, Guam, and Puerto Rico. The company, which went public way back in 1984, has been a consumer goods giant for decades. The last three years have seen a surge in demand for home improvement products due to the pandemic with Home Depot's net sales rising from $110.2 billion in fiscal 2019 to $151.2 billion in 2021.
NYSE: HD
Key Data Points
Earnings have also climbed, surging from $11.2 billion to $16.4 billion over the same period. Home Depot has a history of strong free cash flow generation, which has enabled the company to raise its quarterly dividend without fail from $0.225 per share in 2009 to $1.90 for its latest quarter, a more than eightfold increase in just 12 years. All in all, Home Depot has paid out dividends for 35 consecutive years and looks poised to continue doing so.
Although the company has provided a lackluster outlook for 2022, investors should remember that the pandemic-fueled demand had to abate at some point. Home Depot has been a dependable consumer goods retailer for many decades and its size and track record will enable it to overcome this temporary slowdown to grow at decent rates in the future. Meanwhile, Home Depot is also acquiring for growth after concluding its $8 billion purchase of HD Supply, a national distributor of maintenance, repair, and overhaul products, in late 2020.
McDonald's
When it comes to fast food, there's no name more popular than McDonald's (MCD 1.83%). The burger-and-fries chain is a global food and beverage behemoth with more than 40,000 locations in over 100 countries. Its famous golden arches signify quality food with a great range at affordable prices, and McDonald's is now one of the most well-known fast-food chains in international markets.
NYSE: MCD
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The company has held up well during the pandemic. Total revenue dipped below $20 billion in 2020, but rebounded to $23.2 billion the following year, notching a five-year high. Net income also saw a sharp turnaround to hit a five-year high of $7.5 billion, up from $5.2 billion back in 2017. McDonald's has also been a free-cash-flow machine, enabling the business to pay increasing dividends over 46 consecutive years, bringing it ever closer to joining the ranks of Dividend Kings.
The fast-food giant is also forging partnerships and collaborations to take its business to the next level. Late last year, McDonald's partnered with Uber Technologies to help fulfill orders for its delivery service in multiple regions around the world. The company also collaborated with food-delivery specialist DoorDash to extend the breadth of choices available to consumers for the delivery of the fast-food chain's products. And just last month, McDonald's announced a partnership with Just Eat Takeaway.com and will leverage its extensive network of 500,000 worldwide couriers to enhance its delivery service further.
