I coined the phrase “forever assets” years ago to describe an elite group of businesses that have rewarded investors for decades. These firms sell timeless products and enjoy entrenched market positions, and thanks to this type of competitive advantage, these stocks have crushed the broader stock market. While tech firms have to invent the next hot app every other quarter, forever assets don’t have to run on the innovation treadmill. Likewise, forever assets don’t deal in financial mumbo-jumbo or hard-to-understand investment derivatives. In some cases, many of these firms have made the same product for over 100 years. That has resulted in a reliable, growing stream of income that has lasted for decades.
One great example: The Coca-Cola Company (NYSE:KO). Most people associate the the company with its trademark beverage (hint: it’s in the name), but over the years, the company has acquired a diversified portfolio of leading brands, like “Sprite,” “Fanta,” and “Dasani.” Exciting? Not really, but selling the basics has made Coca-Cola into a cash-flow machine. The company has paid a dividend for over 125 years. Its shares have also beaten the S&P 500, delivering a total return (including dividends) of 12,500% since 1968.
Source: Income Investors
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