Timing the market is a difficult if not impossible task. There are very few professionals and even fewer individual investors who can pick market tops or bottoms with consistency. Even when trends seem clear and well defined — a rare occurrence in today’s markets — it takes tremendous emotional discipline to avoid buying too late or selling too early.
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Buying quality stocks and holding them for the long-term can be a much better idea. A buy-and-hold strategy avoids short-term market timing and takes much of the guesswork out of the decision-making process. It allows investors to concentrate on total return over an extended investment horizon rather than worry about the daily, sometimes wild, swings in the stock market.
Holding stocks through market cycles rather than constantly selling out and buying back in is also a more tax-efficient method of investing. Every roundtrip trade in a nonqualified (taxable) account is a taxable event. Conversely, there is no tax due on unrealized capital gains.
Past performance is not a guarantee of future performance but, historically, the stocks of good companies with long-term track records of success tend to rise over time regardless of what the stock market does in the short-run.
If you’re looking for stocks to own for the long haul, consider this list of the seven best long-term stocks to buy and hold:
| Stock | Sector | Market Capitalization | Trailing-12-month dividend yield |
| Coca-Cola Co. (ticker: KO) | Consumer staples | $256 billion | 3.1% |
| American Water Works Co. Inc. (AWK) | Utilities | $24 billion | 2.2% |
| Consolidated Edison Inc. (ED) | Utilities | $31 billion | 3.6% |
| Kimberly-Clark Corp. (KMB) | Consumer staples | $41 billion | 3.9% |
| 3M Co. (MMM) | Industrials | $53 billion | 6.3% |
| Allstate Corp. (ALL) | Financials | $41 billion | 2.2% |
| Federal Realty Investment Trust (FRT) | Real estate | $8.5 billion | 4.2% |
Coca-Cola Co. (KO)
KO is one of the largest and most successful non-alcoholic beverage companies in the world. Wall Street is estimating that the company will report over $45 billion in revenue when it releases its full 2023 earnings on Feb. 13.
The company has been around for 138 years and is considered a blue-chip stock well suited for investors with a long-term time horizon. The stock has appreciated more than 20% over the last five years and has increased its dividend for 62 years in a row.
KO has somewhat underperformed the broad market over the last few years despite having sound fundamentals. That may be due to an ongoing, multibillion-dollar IRS tax case against them that has been a drag on the stock. The case is winding down towards a conclusion and when it’s finally resolved investors should see better results.
Market cap: $256 billion Trailing-12-month yield: 3.1% Sector: Consumer staples
American Water Works Co. Inc. (AWK)
Ten years ago you could have bought a share of AWK at right around $44. Today the stock price is close to $124. That’s an astounding 181% gain in a single decade. In short, AWK has turned in excellent capital appreciation performance over the long run and paid a healthy dividend along the way.
AWK provides water and wastewater services to customers in several U.S. states including Georgia, Indiana, Iowa, Kentucky, Maryland, Tennessee, Virginia, West Virginia and Hawaii. According to Wall Street’s best estimates the company will report $4 billion in revenue for 2023.
AWK is making meaningful investments in its pipeline system and is getting strong federal support for upgrading infrastructure. This, coupled with the firm’s history of dividend growth, all contribute to the long-term bull case for this stock.
Market cap: $24 billion Trailing-12-month yield: 2.2% Sector: Utilities
Consolidated Edison Inc. (ED)
ED is a regulated gas and electric utility serving commercial and residential customers in New York City, Westchester County, New York, and Northern New Jersey. This blue-chip stock can trace its history back to 1823. They’ve been a dependable, results-oriented company for nearly two centuries.
Last year ED distributed $3.24 in dividends to shareholders. In the upcoming year, shareholders can expect $3.32 per share. That’s a healthy increase of 2.5%. That dividend is sustained by the more than $15 billion in revenue the company generates every year.
Investors should be further encouraged by the company’s ongoing de-risking actions which involve selling off its clean energy ventures and focusing once again on its core business of providing gas, electricity and steam power to its loyal customers.
Market cap: $31 billion Trailing-12-month yield: 3.6% Sector: Utilities
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Kimberly-Clark Corp. (KMB)
KMB was founded as a local textiles and fabric company in a little town in Wisconsin way back in 1872. Today the company is one the world’s premier firms making useful products from natural and synthetic fiber. They make disposable diapers, baby wipes, tissue paper, napkins, paper towels and many other cloth products. They also have a booming business in soaps, sanitizers, detergents and other household and industrial cleaning supplies.
There’s a lot to like about KMB but one thing in particular is the global appeal of its products and the worldwide acceptance of its iconic brands.
KMB is a global company that generates $20 billion a year and has raised its dividend for 52 years in a row. There can be little doubt it belongs on our list of long-term stocks to buy and hold.
Market cap: $41 billion Trailing-12-month yield: 3.9% Sector: Consumer staples
3M Co. (MMM)
MMM is a $50 billion high-tech company that is globally prominent in critical industries like transportation, electronics and health care. Interestingly, the company may be most famous for manufacturing those little yellow sticky notes office workers all over the world post on around their cubicles.
The company is dedicated to the creation of value for both its customers around the world and for its shareholders who have come to expect solid long-term performance. MMM is a leader in the field of material science. They are committed to innovation and the realization of growth opportunities.
The stock is trading at roughly $96 today. CFRA Equity Analyst, Jonathan Sakraida, has a $100 price target on the stock. If it achieves and sustains that price level over the next 12 months and continues to pay its annualized dividend of $6 per share, shareholders could realize a more than 10% total return in 2024. That’s not bad, but the real value in this stock will come over the long run.
Market cap: $53 billion Trailing-12-month yield: 6.3% Sector: Industrials
Allstate Corp. (ALL)
ALL is one of the best-known names in the health and casualty insurance industry. ALL directs most of its marketing efforts at the highly competitive home and auto insurance market but it also underwrites dozens of types of coverage. ALL writes policies that protect cell phones and electronics, digital data, furniture and appliances, and almost anything else consumers need protected. They also have a large and fast-growing health insurance segment.
The extended and diverse variety of coverage ALL offers helped the firm generate more than $13 billion in revenue per quarter over the first three quarters of fiscal year 2023.
The equity research department at Raymond James has a “strong buy” rating on the stock which they reiterated in a report published on Jan. 22.
Market cap: $41 billion Trailing-12-month yield: 2.2% Sector: Financials
Federal Realty Investment Trust (FRT)
FRT is an equity real estate investment trust, or REIT, that concentrates its investment activity in the retail and mixed-use segments of the commercial real estate industry.
FRT considers itself a strategic investor. This REIT looks to buy and hold real estate in population centers where it’s determined that demand for retail development is significantly outpacing supply. Its hope is that the value of its properties will grow faster than the national average. If Wall Street estimates are correct, the company will report more than $1.1 billion in revenue for 2023.
If dividend growth is a reliable indicator, this strategy is succeeding. FRT has increased its dividend for 57 consecutive years.
Market cap: $8.5 billion Trailing-12-month yield: 4.2% Sector: Real estate
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Update 01/26/24: This story was previously published at an earlier date and has been updated with new information.
