Some investors use the word "forever" to describe their intended holding periods. The reality is, however, these investors are often renters rather than owners. In other words, it's not unusual for these well-meaning shareholders to end up dumping their stakes if a company falls out of favor or runs into a complicated headwind.
And who can blame them? Not all companies can readily adapt to change. The best we can do is occasionally reassess a stock's likely future, considering new information that's surfaced since the last time it was scrutinized.
That said, there are a handful of tickers you can truly plug into for a lifetime because change -- or even evolution -- are a core aspect of their business models. Here's a closer look at two companies of this ilk you may want to consider adding to your portfolio sooner than later.
1. Johnson & Johnson
Yes, Johnson & Johnson (JNJ 0.81%) is still dealing with multiple class-action lawsuits linked to the sale of asbestos-tainted talcum powder. The matter is not only an expensive distraction but damaging to its reputation.
It's not the existential threat some investors seem to see it as, though.
You likely know J&J by its consumer products like baby shampoo, Tylenol, allergy relief medication Benadryl, Band-Aids, and more. What you may not know, however, is that these consumer products only make up about 15% of the company's annual sales. Johnson & Johnson is first and foremost a pharmaceutical giant, which accounts for 55% of its typical top line.
J&J is the name behind blockbuster psoriasis drug Stelara, arthritis treatment Remicade, and lymphoma-fighting Imbruvica, just to name a few of its holdings. The remaining 30% of the company's business comes from the sale of medical devices like surgical tools and orthopedic hardware.
While some corporations are selling off disparate businesses in order to focus on doing one thing very well, Johnson & Johnson is making its highly diversified portfolio work to its full advantage. This year's expected sales growth of 3% and next year's projected top-line growth of nearly 4% may not be thrilling, but that's a consistent growth cadence, impressive in light of the near-$100 billion worth of annual revenue the company is doing these days; healthcare isn't exactly a huge growth industry to begin with.
The kicker is its dividend. J&J's current yield is a healthy 2.6%, and its annual dividend payout has been increased every year for the past 60 years. That makes it one of the market's most reliable dividend growers, even among the Dividend Aristocrats.
2. Microsoft
In the same vein as Johnson & Johnson, Microsoft (MSFT 1.61%) is a great lifetime holding simply because it can adapt as needed to an ever-changing technology market.
Today's Microsoft is nothing like the Microsoft of the 1980s and '90s when the computer industry was still young. Then, its Windows operating system was its chief product. Productivity software was also a key piece of its revenue mix. Now, the company makes video game consoles, helps enterprises manage their clouds, provides online collaboration platforms, and also owns professional networking site LinkedIn. And of course, office productivity and operating systems are still profit centers, even if not as important as they used to be.
This sideways expansion has paid off big time. For perspective, Microsoft's fiscal 2021 revenue of $168 billion is nearly seven times bigger than 2001's top line of $25 billion. The stock's currently priced seven times higher than it was 20 years ago as well.
Not all growth trends last forever; perhaps this one won't either. That's not Microsoft's most likely future, though. Now that the world's become hyper-reliant on computers, the cloud, and web-based business tools, abandoning this tech would be a decided step back.
If anything, the world's apt to become even more reliant on technologies made by Microsoft, like its Hololens augmented-reality goggles and its recently unveiled AI-powered sales tool called Viva. Among other tasks, Viva automatically fills in a salesperson's forms, provides data-based feedback on sales calls, and works with third-party customer relationship management platforms.
And these are just some of the company's innovations and improvements of existing technologies. The sky's the limit on future growth leaps, and Microsoft's got a long history of pushing these limits.
