I coined the term “forever asset” to describe a group of top dividend stocks that have rewarded shareholders for decades. These wonderful businesses enjoy entrenched market positions, allowing them to crank out wide profit margins year after year. Over the past few months, I’ve covered a number of these companies. I’ve shown you how boring firms like soda, railroads, and cell phone towers can make great investments. And if you’re looking for a retirement income stream, these boring businesses make for some of the best stocks around. Today’s article highlights one of my favorite “forever assets” ...
Kellogg Company (NYSE:K) is the leading producer of ready-to-eat cereal, but also sells crackers, potato chips, and other assorted snacks. And while you won’t impress any MBAs sticking this name in your portfolio, I love the business. To start off, it’s depression-proof. No matter what the economy is doing, people need to eat. Shoppers buy food regardless of inflation, interest rates, or widening credit spreads. Next, it’s an incredibly lucrative business. Kellogg earns 40% gross margins. Over the past five years, the company has collected $0.37 in profit on every dollar of equity invested in the business. Finally, this is one of the most reliable dividend payers around. Kellogg has been mailing out checks to shareholders since 1925—back when Calvin Coolidge was President.
Source: Income Investor
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- The Wit and Wisdom of Warren Buffett
- The Perfect Dividend Stock
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