Ideally, anytime you're investing in a stock, you're doing so with a long-term mindset. Famed investor Warren Buffett once said, "If you aren't thinking about owning a stock for 10 years, don't even think about owning it for 10 minutes," and that's the mindset I try to keep.
Admittedly, this is often easier said than done, but it should be the goal nonetheless. If you're looking for a couple of stocks that you could comfortably hold for the next decade, look no further than Coca-Cola (KO -0.12%) and Altria (MO +0.45%). Both have time-tested businesses and attractive dividends, making them worth holding for the long haul.
Image source: The Motley Fool.
1. Coca-Cola
Few brands are as globally known as Coca-Cola, and few products are as iconic as its flagship Coca-Cola soda. The company has distribution in more than 200 countries, and its asset-light business model helps it operate efficiently.
NYSE: KO
Key Data Points
Although you can buy Coca-Cola products virtually anywhere in the world, Coca-Cola itself doesn't bottle or can the finished drinks. It sells syrups and concentrates to bottling partners that then produce, package, and distribute the final products. Coca-Cola has 20 bottlers, around 125,000 suppliers, and around 33 million customer outlets.
Coca-Cola's model allows it to operate with much higher margins than competitors like PepsiCo (PEP -0.62%). For perspective, PepsiCo's revenue was $10.7 billion more than Coca-Cola's in its most recent quarter, but its net income was more than $1.4 billion lower.
KO Revenue (Quarterly) data by YCharts
When you invest in Coca-Cola, you're getting a company with efficient operations, products that sell regardless of the economy, and, arguably more important for many investors, one of the best dividends on the market. The latter is what attracts many investors to Coca-Cola's stock.
Coca-Cola is a Dividend King (a company with 50 years of consecutive dividend increases), with 64 consecutive years under its belt. Only eight companies on the stock market have a longer streak. Its stock is up 27.8% this year (through Sept. 14), so its current 2.3% dividend yield is below its historical average, but still above average and reliable.
I wouldn't expect Coca-Cola's stock performance so far this year to be the norm, but it's still a great long-term investment. The stock is on the expensive side compared to where it usually trades, but that shouldn't deter you if you're in it for the long haul.
2. Altria
Altria is the largest tobacco company in the U.S., with brands such as Marlboro, Copenhagen, Black & Mild, and Njoy under its wing. So far this year, the stock is up 20.5%, continuing an impressive run that's seen it surge 75% since the start of 2024.
NYSE: MO
Key Data Points
Like Coca-Cola, Altria's main appeal is its dividend. With a 6% yield, it's one of the highest-yielding stocks in the S&P 500. And that's even after its stock run-up this year. It spent the earlier part of the year with yields well over 7%. It's also a Dividend King, with 57 consecutive years of increases (61 total in that time), so it has stood the test of time.
Altria's business continues to bring in lots of cash, even though smoking rates are declining, affecting volume. That's because the tobacco industry comes with a lot of pricing power. It generally takes a lot to price tobacco users out of their go-to brands, so Altria has been able to offset its declining and stagnant volume with higher prices.
"Just keep raising prices" shouldn't be the long-term strategy discussed in the boardroom, but it buys Altria time while it works on its smoke-free segments. That has proven much easier said than done, but I believe Altria's business is still in good enough shape to remain the dividend giant it is today. After all, the dividend is realistically why you'd invest in the stock in the first place.
If you're looking for a good income piece to your portfolio for the next decade, Altria checks that box.
