After a sharp downturn in 2022, investors may be looking for high-risk, high-reward equities to bank on as opposed to boring stocks to buy and hold forever. I get it. As some of the hottest names get cheaper, a temptation exists to pick them up for pennies on the dollar. However, the challenge with higher-risk ideas is that they can always get even cheaper.
On the other hand, boring stocks to buy and hold almost always align with deeply established businesses. While they won’t offer the outstanding growth potential of aspirational ideas, they probably won’t leave you hanging when the going gets rough. And given all that’s transpired in the new normal, the going could get rougher than we might think.
That’s not to say that speculation should be avoided at all costs. However, demand predictability also makes a strong case for itself. Therefore, investors should give strong consideration to these boring stocks to buy and hold forever.
| PG | Procter & Gamble | $141.40 |
| CL | Colgate-Palmolive | $73.85 |
| ALL | Allstate | $134.98 |
| CAT | Caterpillar | $251.42 |
| KR | Kroger | $44.54 |
| KO | Coca-Cola | $60.17 |
| ADM | Archer-Daniels-Midland | $82.56 |
Procter & Gamble (PG)
When it comes to the most visible names in the global economy, Procter & Gamble (NYSE:PG) certainly ranks in the top echelon. At the same time, PG easily ranks among the boring stocks to buy and hold forever. One, household goods like detergent and toilet paper don’t generate much excitement (pandemic-era shortages aside). Two, because consumers use them all the time, Procter & Gamble benefits from revenue predictability.
On the financials, the case for PG as one of the boring stocks to buy becomes quite attractive. With a three-year revenue growth rate of 5.8%, it ranks a bit better than middling for the industry. That’s quite boring. However, on the bottom line, the company sports a net margin of nearly 18%. This beats out nearly 92% of the competition. Now that’s quite exciting and attractive for prospective investors.
Sure enough, Wall Street analysts remain onboard with PG, pegging it a consensus moderate buy. Also, their average price target’s implication of 9% upside and a forward dividend yield of 2.56% makes for an enticing profile.
Colgate-Palmolive (CL)
Another entry among boring stocks to buy and hold forever, Colgate-Palmolive (NYSE:CL) won’t get investors jumping out of bed. However, the company makes for a compelling upside narrative. As it turns out, many people avoided the dentist during the roughly first two years of the coronavirus pandemic. This circumstance suggests that when stuff hits the fan, the health service people will sacrifice first is dentistry.
Cynically, then, Colgate represents a beneficiary as cash-strapped consumers probably won’t give up brushing their teeth (i.e. self-dentistry). That should help in the revenue predictability department. And that’s exactly what you’re getting with the financials. Colgate features slightly better than middling revenue. On the other end, the company enjoys a net margin of nearly 10%. That’s better than almost 80% of the underlying industry.
Currently, Wall Street analysts peg CL as a consensus moderate buy. Also, their average price target implies an upside potential of nearly 7%. While not much, Colgate also provides a forward yield of 2.53%. Overall, it provides a strong case for boring stocks to buy and hold.
Allstate (ALL)
There’s no way around it. Allstate (NYSE:ALL) is boring as [bleep], as some folks might colorfully state. At the same time, Allstate is relevant as [bleep]. Indeed, it might be the most [bleep]-ing critical name on this list of boring stocks to buy and hold indefinitely. As an insurance provider, the company protects people from the unknown. And in many cases, the unknown imposes a sharp financial burden.
Further, the Covid-19 crisis probably helped the insurance industry overall. Now, people lack plausible deniability: anything and everything can happen to us (even Americans). With Allstate, the financial narrative pivots from the other boring stocks to buy. Here, long-term revenue trends rank conspicuously better than the sector average. However, profitability has been down, likely a consequence of the troubles of the new normal.
Still, that’s no bother for Wall Street analysts. Currently, experts peg ALL as a consensus moderate buy. In addition, their average price target of $141.58 implies an upside potential of nearly 8%. Combined with a forward yield of 2.59%, you have a solid case for boring stocks to buy.
Caterpillar (CAT)
If you’re former President Donald J. Trump, calling Caterpillar (NYSE:CAT) one of the boring stocks to buy might be akin to fighting words. Frequently, he’s sung the praises of the heavy equipment provider. These days, Caterpillar might become a beneficiary of his successor, President Joe Biden. Thanks to the Infrastructure Investment and Jobs Act, Caterpillar may enjoy a very relevant forward framework.
Further, the company may represent a downwind beneficiary of the electric vehicle revolution. Extra weight contributes to greater wear on roadways and EVs tend to be heavier than their combustion counterparts. Financially, Caterpillar’s three-year revenue growth rate stands at 5.7%, which ranks better than average. However, it’s not by a great magnitude. On the other end, the company’s net margin pings at over 11%. This ranks better than over 88% of the competition, making CAT an intriguing name among boring stocks to buy.
Finally, Wall Street analysts peg CAT as a consensus moderate buy. While their implied 5% upside target isn’t much, Caterpillar carries a (very dependable) forward yield of 2%.
Kroger (KR)
For Kroger (NYSE:KR), its inclusion among boring stocks to buy and hold forever justifies itself. As a major grocery outlet, the company effectively represents vital infrastructure. To be fair, it’s a slow-and-steady performer. For instance, during the trailing year, Kroger shares dipped about half a percent below parity. Still, KR didn’t leave investors gasping for air as did a majority of stocks. So, it’s doing its job.
Financially, Kroger doesn’t carry a remarkable profile. It just does what it needs to, making it one of the most effective boring stocks to buy. For instance, its three-year revenue growth rate stands at 6.4%, better than 64% of sector rivals. And its net margin of 1.6% is a bit below the median ranking for the industry but not by much.
Most attractively, the market prices KR at a forward multiple of 10.54. As a discount to forward earnings, Kroger ranks better than 85% of industry players. Finally, Wall Street analysts peg Kroger as a consensus moderate buy. Further, their average price target stands at $52.57, implying an upside potential of over 18%. Thus, it’s well worth considering for boring stocks to buy.
Coca-Cola (KO)
One of the most iconic American firms and a symbol of western-style capitalism, Coca-Cola (NYSE:KO) needs no introduction. At the same time, it ranks among the boring stocks to buy because Coca-Cola can’t really expand that much more than it has. Nevertheless, the brand carries tremendous social cachet. With its various initiatives targeting millennials and young consumers overall, Coca-Cola keeps the lights on.
Financially, the company epitomizes the classic profile of boring stocks to buy. Operationally, top-line growth during the past three years pings at 3.7%. Generally, this ranks better than 59% of the competition (good but not blisteringly great). In terms of net margin, however, Coca-Cola posts 23.4%, ranking better than over 94% of its peers.
Among Wall Street analysts, they peg KO stock as a consensus strong buy. Moreover, their average price target stands at $66.40, implying an upside potential of nearly 11%. Combine that with the company’s forward yield of just under 3% and you have an outstanding narrative for boring stocks to buy.
Archer-Daniels-Midland (ADM)
A multinational food processing and commodities trading firm, Archer-Daniels-Midland (NYSE:ADM) commands an incredibly relevant profile. Despite its importance, though, it’s one of the boring stocks to buy. Sure, the business is critical. On the other hand, retail investors throughout the new normal tend to chase exciting fads. Unfortunately, food processing doesn’t really get the juices flowing.
Still, ADM represents a very competent player. In the trailing year, shares gained over 8% of equity value. That’s a heck of a lot more than what the benchmark equities index mustered. Financially, the increased demand for critical products bolstered demand for ADM. Presently, its three-year sales growth rate stands at 16.5%, outpacing nearly 83% of its rivals. As well, the company enjoys a decently stable balance sheet.
Finally, Wall Street analysts love ADM, pegging it a consensus strong buy. Further, their average price target pings at $104.20, implying an upside potential of nearly 27%.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.