President Donald Trump's "America First" policy has put American companies back in the spotlight. Trump wants to prioritize national interests, with a focus on boosting domestic manufacturing and protecting key industries from unfair trade practices and foreign competition, among other things.
Trump's tariffs and trade actions, therefore, are a key part of the America First strategy, the potential mid- and long-term implications of which have renewed investor interest in American companies like these two, both of which have been around for 100 years now. Buying these stocks now and holding them for the long term could prove hugely rewarding for shareholders.
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Ready to ride a megatrend
NextEra Energy (NEE 1.18%) calls itself "America's energy company," and rightfully so -- it owns America's largest electric utility, Florida Power & Light Company (FPL), with over 6 million customer accounts.
While natural gas currently accounts for over 40% of total electricity generated in the U.S., the International Energy Agency (IEA) projects the share of renewables to rise rapidly in the coming years. NextEra Energy is perfectly poised to take advantage of the trend, as it is also the world's producer of wind and solar energy and one of the most diversified energy providers in America. NextEra Energy generates over 50% of electricity from renewables, 36% from natural gas, and 8% from nuclear energy.
It's an incredibly powerful business mix, one that combines the stability of a utility with growth from renewables. That explains why NextEra Energy stock has generated solid returns for investors over the years despite essentially being a boring utility stock.
NextEra Energy is growing rapidly. It already has a renewables and energy storage backlog of over 27 gigawatts (GW) and believes it could develop up to 46.5 GW of new capacity through 2027. For perspective, NextEra Energy currently has around 38 GW of renewables and storage.
Between FPL and renewables, NextEra Energy plans to invest nearly $120 billion on its energy infrastructure over the next four years. All that spending should boost the company's cash flows and dividends, with management already aiming for a 10% annual dividend growth through at least 2026. NextEra Energy has paid dividends since 1991 and increased it for over 20 years now, making it one of the most incredible stocks for dividend and growth investors alike to buy now and hold.
An iconic American powerhouse
Caterpillar (CAT -0.01%) is one of the most iconic American brands, recognized globally for its signature yellow machinery and logo. It started as a tractor company in 1925. Today, Caterpillar is the world's largest manufacturer of construction and mining equipment, aside from off-highway diesel and natural gas engines and turbines.
However, that also makes Caterpillar a cyclical stock, with tariffs adding an element of uncertainty now. Yet Caterpillar is among the few American companies you can buy and never sell. This is much like the strategy of legendary investor Warren Buffett, who believes in buying great businesses, not just stocks, and holding the shares for practically "forever."
Despite the cyclicality of its businesses, Caterpillar stock has outperformed the S&P 500 (^GSPC 0.83%) by huge margins over the years, especially with reinvested dividends. Caterpillar is also a powerful dividend stock, having increased its dividend for 31 consecutive years. If you'd bought Caterpillar stock 10 years ago and reinvested those dividends, you'd have made more than 500% in total returns.
CAT Total Return Level data by YCharts
Caterpillar's leadership position in the industry, massive size and scale of business, extensive dealership network, and management's prudent capital allocation have been the keys to its success over the years.
To put some numbers to that, Caterpillar has dealers across 190 countries, and it generated nearly $65 billion in sales in 2024. Since 2019, Caterpillar has returned almost $40 billion of free cash flows from its core machinery, energy, and transportation businesses to shareholders in the form of dividends and share buybacks. Caterpillar also runs a financing business for its dealers and customers.
Caterpillar has navigated many a storm and remains largely undeterred amid the tariff uncertainty, since it serves diverse end markets, has its largest manufacturing base in the U.S., and is a net exporter of goods. With its order backlog increasing by a record $5 billion in the first quarter, Caterpillar is among the few American stocks you'd want to buy now and never sell.
