3 True Buy-and-Forget Stocks

Here’s why Imperial Oil Limited (TSX:IMO)(NYSEMKT:IMO), Potash Corp/Saskatchewan (TSX:POT)(NYSE:POT), and Pembina Pipeline Corporation (TSX:PPL)(NYSE:PBA) deserve a permanent place in your portfolio.

| More on:
The Motley Fool

You need courage to buy stocks nowadays.

After this week’s stock market plunge, many investors are afraid to even look at their account statements. How do you invest in the midst of so much turmoil?

My advice is to buy “Forever Stocks”. For those of you aren’t familiar, Forever Stocks is a name I’ve given to a group of companies that have rewarded shareholders for decades. Thanks to their durable competitive advantages, these businesses have consistently beaten the market over generations.

When you own stocks like these, you know longer have to worry about things like inflation… recessions… oil prices… or flash crashes. If history is any guide, these companies will continue to crank out steady dividends for decades to come.

Of course, such companies are rare. Most of these firms are privately held. However, over the years I’ve identified a few of these wonderful businesses that are still publicly traded. Here are a few examples to get you started.

1. Imperial Oil Limited

It might seem odd recommending an energy stock in light of the recent oil patch turmoil. However, Imperial Oil Limited (TSX: IMO)(NYSEMKT: IMO) seems to emerge stronger through each commodity cycle. The firm’s integration of production and refining operations helps to smooth out the volatility.

But the real key to the company’s success is a culture of disciplined capital allocation. Imperial avoids high-risk investments that are sensitive to oil prices. Instead, management focuses on projects that are low-cost and profitable. That’s how it routinely squeezes out more profit per barrel than any of its competitors.

You won’t get rich overnight holding Imperial. However, the firm sports a triple-A debt rating, has a huge cash position, and generates billions in profits every year. So the company should have little trouble hiking dividends and buying back stock in the years to come.

2. Potash Corp/Saskatchewan

We’re hitting the limits of our ability to feed a hungry planet. Populations are growing. Water tables are nearly depleted. Climate change is only compounding these problems. To grow more food on less land, farmers are demanding ever greater quantities of fertilizer.

Potash Corp./Saskatchewan Inc. (TSX: POT)(NYSE: POT), the world’s largest producer of potash fertilizer, stands to profit the most from this trend. If there’s one business principle you can always count on, it might be this: everybody has to eat. That means investors can count on a growing stream of distributions in the years to come.

3. Pembina Pipeline Corporation

Pembina Pipeline Corporation (TSX: PPL)(NYSE: PBA) is vital to your day-to-day life, though you may not even know this company exists. The firm owns pipelines, terminals, and storage facilities throughout Western Canada. This is the infrastructure that ships and stores commodities like gasoline, diesel, crude oil, and jet fuel.

In return for moving and storing these products, Pembina earns a fee that it then passes on to investors. Since going public in 2001, this company has never missed a dividend. And over that period, it has increased its payout more than 35 times.

The best part is, Pembina isn’t impacted by recessions or wars. The pipeline’s cash flows are as steady as bond coupons. No matter which direction oil prices go, this company still gets paid.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no position in any stocks mentioned. The Motley Fool owns shares of PotashCorp.

More on Stocks for Beginners

Solar panels and windmills
Energy Stocks

How Brookfield Renewable Stock Gained 40% in a Month

Brookfield Renewable stock (TSX:BEP.UN) surged in share price from a landmark deal and strong earnings, leading to a 40% jump.

Read more »

Growth from coins
Dividend Stocks

How Much Will Telus Corporation Pay in Dividends This Year?

TELUS stock (TSX:T) paid out $947 million in dividends in 2023, and it looks like the payout could rise even…

Read more »

edit Real Estate Investment Trust REIT on double exsposure business background.
Dividend Stocks

The 3 Top Canadian REITs to Buy in May 2024

These REITs in strong sectors are well-positioned to deliver passive income through regular dividend payments.

Read more »

Businessperson's Hand Putting Coin In Piggybank
Stocks for Beginners

3 Dividend Stocks Every Investor Should Own

Heading into earnings season, which bank stocks are best for dividend income?

Read more »

calculate and analyze stock
Stocks for Beginners

2 Stocks I’d Buy in 2024 (And 1 I’d Avoid!)

Are you looking for growth in a recovering market? Then it could be time to get out of these stocks…

Read more »

Upwards momentum
Stocks for Beginners

These 2 TSX Stocks Have up to 49% Upside, Bay Street Analysts Say

Besides Street analysts’ positive expectations, here are the main fundamental factors that could drive these two TSX stocks higher in…

Read more »

Overhead shot of young adults using technology at a table
Tech Stocks

1 Stock That’s Just as Hot as Tesla Stock  (Without All the Hype)

Sure, Tesla stock (NASDAQ:TSLA) has the headlines, but this other stock has far more growth, with even more on the…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

This 5% Dividend Stock Pays Cash Every Month

This monthly dividend stock offers cash every month, but also returns that continue to climb higher from being in a…

Read more »