The Next 30 Years

[rapidacid]

I know I'm reinventing the wheel here but I feel a bit stuck in my own analysis. I've rolled over a 401K to a Roth IRA and am starting to look at which stocks I'll be buying. I'll be fully DRIPping all equities so I'm looking for ideas that will be paying out for the next 30 years as well as hopefully bumping their dividend every year.

I've got two ideas for each sector so I'd like feedback on those selections if anyone would be so kind. Suggestions for replacements or additions would be great. I'll be contributing the $5,500 a year into new ideas as we go. I'm aiming for 3 ideas each sector.

Mostly these selections are plucked from my existing taxable account so I feel I haven't really looked at anything new. SBUX, TROW, GILD and SO are the only things I don't already own.

I'm not married to these ideas at all so feel free to rip them apart.

Basic Materials:
MON
DOW

Communication Services:
VZ
T

Consumer Cyclical:
SBUX
DIS

Consumer Defensive:
MO
KO

Energy:
XOM
KMI

Financial Services:
WFC
TROW

Healthcare:
JNJ
GILD

Industrials:
UNP
MMM

Real Estate:
O
OHI

Technology:
AAPL
MSFT

Utilities:
WEC
SO

[EricL]

Nice list of stocks there, two others to consider would be either CVS or Walgreen's. As boomers continue to age, prescription drug use will continue to rise. Both have 20 year growth rates of greater than 13% and are expected to continue growing at similar rates going forward.

[ChadR]

I'd go with PM over MO. Foreign market is bigger and in some countries the smoking rate is increasing. Also PG will most likely be around in 30 years with a growing dividend.

[Dividend Watcher]

rapidacid, good list so far. I like most of them and the rest I don't know well enough to hazard an opinion. The problem I have coming up with ideas is that we all come into this game with our own biases and preconceived notions. What may seem like an interesting idea to me wouldn't interest you in the least and versa vice. That being said, here's a few of my guesses off the top of my head . . .

Basic Materials:

This is a tough sector. Many of the fields are capital-intensive and very cyclical. Sometimes I wonder if this isn't a sector where you only hold the same companies for 10-15 years and then expect to move on to another.

• BBL - if they can maintain the dividend through not only the upcoming divestiture but also the double whammy to them of the crash in the metals market we're experiencing along with the swoon in oil prices, then I think management is really focussed on growing the business for the benefit of the shareholders.
  
• PX or APD - Praxair seems to be the less encumbered company right now. APD is dealing with activist investors and has had problems growing their end markets for a while. I see light at the end of the tunnel for them and they have been growing the dividend for quite a few years.
  
• BMS - steady performer for over 30 years now. Not mentioned very often but if you can get it when it's cheap it may be a good longer-term play.
  

Communications:

• TU or BCE - I like TU better for their growth and potential in related fields. The Canadian cell market has a much lower penetration than the U.S. so there's still room to sell the 3rd or 4th device to each household and add another revenue stream. You have to deal with currency issues but over the next 10-30 years it will average out.
  

Consumer Cyclical: (Discretionary, I presume?)

• GPC - hard to compete with the NAPA brand. Just need to get it at a value.
  
• MGA - alternative to GPC. Again, the currency non-issue (to me) for long-term holders.
  
• ROST/TJX - either one's going to grow very well for the long term in my opinion.
  
• VFC - they seem to keep hitting it. Maybe it's their diversification.
  
• MCD - I think they'll come out of this slump just fine. We may be eating McSprout sammiches with McHummus but they'll still be making money.
  

Consumer Defensive: (Staples?)

• GIS - they're almost everywhere in the grocery store. If eating healthy is not a fad, they'll adapt. They have for over 100 years.
  
• CHD - they just seem to keep growing despite the market being supposedly saturated. Also have room to grow internationally.
  
• CL - they just keep doing it.
  

Energy:

• SLB/HAL - my impression is they are the go-to's for the majors on logistics, planning and services.
  
• NOV - if they come through this slump without being too slimmed down or encumbered with debt, I think they'll grow faster than SLB/HAL.
  

Financial Services:

• AFL - at some point AFL will surprise everyone. In 20 years, the older Japanese population will be dead so if they aren't making money there, they'll shift their focus someplace else.
  
• RY/TD/BMO/BNS - alternative to U.S. banks. I've already mentioned the currency issue above. Slightly better Tier 1 capital ratios although I haven't researched WFC.
  

Healthcare:

• AMGN - an alternative to GILD and still has a lot of promise after how many years?
  
• BDX - they've just been steady for years. Every year you get a 10% Christmas present and their payout ratio is still low.
  

Industrials:

My favorite. I like companies that make things and especially if they are innovative.

• UTX - low payout, steady grower and constantly evolving albeit at a slower pace than smaller companies.
  
• PH - cyclical but make a lot of things that constantly need to be repaired/replaced. Good dividend growth culture with the company.
  
• ITW - don't advertise themselves much but are constantly buying or developing new product lines. Somewhat like 3M.
  
• DE/CAT - cyclical but both seem shareholder focussed. Some would say best in class in their industry.
  
• GWW - pretty steady double-digit grower for a company as big and old as they are.
  
• VMI - hardly anyone has heard of them but the go-to for efficient agriculture irrigation and have a pretty good infrastructure segment.
  

Real Estate:

• HCP - being the only REIT Aristocrat for now counts for something. I like the diversification across 5 healthcare segments despite the Manor Care issue recently.
  
• WPC - like their international exposure.
  
• VTR - same as WPC but in health field.
  

Technology:

• QCOM - they could have a slump like they did in the 00s but so had INTC. They've been around a while so they know how to manage the bad times.
  

Utilities:

• D - I'm still leery but chowder makes a lot of sense. Shedding the ng transmission lines but keeping partial ownership could bring them a lot of revenue without all the work.
  
• AVA - smaller market cap than most utes. Don't bet on a buyout/merger although long-term consolidation in the industry could do that. In the meantime, they are slowly growing and have a stable customer base. I bet they're looking at smaller deals themselves like they did with the Alaskan deal.
  
• XEL - I like their geographic diversity although their dividend growth has been a little weak over the last decade.
  
• ES - despite all the bad talk about their regulators, or maybe because of it, they've done quite well over the last decade. Somebody had to have noticed since the P/E got up to the mid-20s this winter.
  

Most of these are overpriced right now. Some I wouldn't even consider until a sizable drop in price and some I'll avoid because by the time the dividend grows into a decent amount I'll probably be dead.     For someone with 20-30 years, you could take advantage of it.

Also, I like Eric's and Chad's suggestions above.

[Bogart]

Some ideas:

V
MC
HSY
MKC
SJM

[navyasw02]

You already have a taxable portfolio, correct? I wouldn't duplicate any holdings in a Roth and I would also establish some criteria of a minimum dividend threshold to reap the full tax advantages of the Roth.

[rapidacid]

Thanks to everyone for taking the time to read and respond. I'm somewhat proud that a large portion of the stocks mentioned are already in my taxable account. I've added some ideas from my existing taxable account as well as some of the ideas mentioned here. I'm at about 36 companies now. I'll update again once I make my purchases next week.

Thanks!

[DividendsandTea]

What are thoughts on NKE?

[crimsonghost747]

Might have missed it since I don't know all the tickers by heart, but have you thought about adding some defence sector companies such as Raytheon or Lockheed Martin? Any of the big names should be fairly stable in the long run and they have quite a good reputation of constantly increasing dividends. They are quite pricy at the moment though.

[rapidacid]

(04-04-2015, 11:07 AM)crimsonghost747 Wrote: Might have missed it since I don't know all the tickers by heart, but have you thought about adding some defence sector companies such as Raytheon or Lockheed Martin? Any of the big names should be fairly stable in the long run and they have quite a good reputation of constantly increasing dividends. They are quite pricy at the moment though.

I own both in my taxable and added LMT to my Roth list a little while ago.

Not really loving SO the more I look at it. Diving in deeper to DW's utility suggestions ...

[Roadmap2Retire]

Rapid, Between your picks and the picks from DivWatcher, you have most great companies covered. My comment would be on the utilities sector - to look into/explore water utilities.
Usually, we tend to think of utilities as just electric companies and sometimes look at diversified utils, but water utilities imo has a bright future. Water is probably one of the most precious commodities of the future - and with the dwindling water supplies everywhere (California is just the beginning of this issue), investing in water is no-brainer. If the climate change models are to be trusted, we will see a lot of disruption not only in the coastlines and population displacement, but also in the freshwater availability.

Unfortunately, the market is not developed enough and you cant trade water like oil or other commodities (the leader here seems to be the Australian market which is much more advanced in water trading). For us here in N.America, utilities seem to be the only way to play water right now. The other alternative to look at companies like Veolia (did they get delisted from NYSE?...I thought it was available to trade on the N.American markets - I just checked Google Finance and couldnt find a ticker) or look at companies which have a desalination/water treatment component (a company like Ecolab springs to mind - but I havent done enough research there yet). Also, I think PH has a water component to it, but Im not sure what exactly it does.

[twil]

Nice list rapid.
With 5k a year how do you split your investments per year ?

Do you just make the investment fee 1% of total cost ?
That's my rule for my regular account. I just set up a Roth and I am trying to figure out how many companies I can purchase per year. Or what is the average people do on here?