The Motley Fool

3 Dividend Dynasties to Buy and Hold Forever

Image source: Getty Images

Charlie Munger, Warren Buffett’s partner at Berkshire Hathaway, believes that investing is largely a game of patience.

Munger and Buffett have displayed a talent for picking the right stocks, but sticking with them for decades is what’s provided a lot of their outperformance.

“If you took our top 15 decisions out, we’d have a pretty average record,” Munger said. “It wasn’t hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on them with vigor.”

No matter what the overall stock market does, there are always bargains to be had. The benefit of a buy-and-hold strategy is that you don’t need to worry about market fluctuations from one year to the next.

If you’re looking for stocks that you can buy and hold forever, start with the three stocks on this list, all of which pay handsome dividend streams.

Lucara Diamond (TSX:LUC)

Lucara’s business model is simply to mine and sell diamonds.

The company owns a 100% stake in the Karowe diamond mine, located in Botswana. This mine has been in production since 2012, quickly becoming one of world’s biggest producers of large, high-quality diamonds.

Unlike most management teams that run mining companies, Lucara has been surprisingly shareholder friendly. Since 2014, it has paid out more than US$250 million in dividends. Its current market cap is just US$480 million.

The share price has fallen by around 20% recently, but I’ve argued that this drop was mostly caused by temporary pricing issues. Long term, there’s no reason to believe that Lucara won’t be able to replicate its pricing premium of the past.

With a fully covered 6.2% dividend, you have plenty of time to wait for the market to properly reward this winning stock.

Chemtrade Logistics (TSX:CHE.UN)

Chemtrade is another high-paying dividend stock. Currently, the dividend yield is above 14% per year.

While this may seem aggressive, the company has been paying the same dividend for nearly 15 years. It’s never cut the payout.

Chemtrade distributes industrial chemicals to customers from more than a dozen industries. While the company deals with many materials that have volatile pricing, its diversified nature has helped create a stable stream of income for investors.

In many of its businesses, Chemtrade is either the largest or second-largest competitor, creating a structural pricing advantage that has fueled cash flow for more than a decade.

On April 18, the company reaffirmed the monthly $0.10 dividend. If history is any suggestion, this is a dividend stream you can count on for years to come.

Molson Coors Canada (TSX:TPX.B)(NYSE:TAP)

Perhaps the greatest metric of all to determine the strength of a dividend stock is the resiliency of the payout.

During tough times, large companies can issue shares or sell debt to keep the dividend afloat. Eventually, earnings and cash flow must return to support the payout.

Molson Coors is about as resilient as it gets.

Founded in 1786, Molson Coors remains the oldest brewery on the continent. The stock’s performance during the 2008 and 2009 financial crisis proved how durable this company is.

When global markets fell between 20% and 60%, Molson shareholders lost nothing. The dividend was maintained as well.

Today, the dividend yield is 2.6%. That isn’t the highest yield on the market, but it’s certainly one of the most reliable.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

The Motley Fool owns shares of Berkshire Hathaway (B shares) and Molson Coors Brewing. Fool contributor Ryan Vanzo has no position in any stocks mentioned. Chemtrade is a recommendation of Dividend Investor Canada.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.