Buying and holding stocks is easier said than done. Ideally, you find a great company, buy the stock, and let it grow and pay you dividends forever. The problem is that few companies fit that bill. The world changes, and the competition is ruthless. A company must evolve and stay on top to justify owning the stock year in and year out.
Yet, there are some exceptions, and these are companies with wide moats and competitive advantages that have stood the test of time. If you want decades of passive income from steady dividend streams, listen up. Consider buying and holding these two stocks right now.
1. The battle-tested leader of big oil
ExxonMobil (NYSE: XOM) is an integrated oil major, a company that explores and drills for oil and gas, refines it, and sells it to the market. Participating in different parts of the oil and gas supply chain diversifies the company, helping it withstand fluctuations in commodity prices. For example, falling oil prices would hurt ExxonMobil’s exploration business but boost profit margins in the refining business. In total, ExxonMobil generates over $340 billion in annual revenue.
The company boasts a sprawling portfolio of assets, including land and equipment, valued at nearly half a trillion dollars on its balance sheet. ExxonMobil has proven able to shuffle its assets, selling pieces to raise cash or acquiring new assets when an opportunity arises. It acquired Pioneer Energy for almost $60 billion earlier this year, which boosted ExxonMobil’s footprint in resource-rich regions like the Permian Basin and Guyana.
ExxonMobil’s management team has also managed the company’s balance sheet well, which acts as a safety net when industry downturns hurt profits. The company has a stellar AA- credit rating from Standard & Poor’s and a debt-to-equity ratio of just 0.16, its lowest in a decade.
If that’s not enough to give you peace of mind, look at ExxonMobil’s dividend history. Management has raised the dividend for 42 consecutive years, including during multiple recessions and a worldwide pandemic that essentially froze the global economy…
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