Yahoo Finance 10 Boring Stocks That Are Important for Your Portfolio
In a world in which so-called "meme" stocks can more than double overnight based on nothing more than Reddit message board threads, it can seem out of step to buy old-school stocks like oil companies or utilities. Yet, these types of "boring" stocks might actually be what you need right now.
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At the end of the day, the stock market is not a "get-rich-quick" scheme. Many of the same meme stocks that shot up overnight have also turned those gains into huge losses. For many investors, reliable, old-fashioned companies with consistent earnings and dividends are just the ticket for long-term gains, even if they're not the type to jump 50% or more in a single day.
As with any investment, be sure to consult with your financial advisor and discuss your investment objectives and risk tolerance before you make any moves. Here's a look at some "boring" stocks that may put long-term dollars into your pocket.
3M (MMM)
Stock price as of Jan. 20: $120.65
When it comes to so-called "boring" stocks, 3M has to be near the top of the list. The venerable maker of such household products as Scotch Tape and Post-It Notes certainly doesn't have the headline-making power of, say, electric vehicle maker Tesla or iPhone maker Apple. Yet, 3M has been a member of the Dow Jones Industrial Average since 1976, it has paid dividends to shareholders without interruption for more than 100 years, and it has raised its dividend for 62 consecutive years. Currently, the stock's yield sits at an extraordinary 5.03%. Put it all together, and as boring as 3M may seem, stock credentials don't get much more blue-chip than that.
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Public Storage (PSA)
Stock price as of Jan. 20: $289.10
Public Storage is the largest owner and operator of self-storage facilities in the world. This certainly doesn't sound like an exciting business. However, it's a great "boring" stock to own due to its consistency. Americans are nothing if not excellent consumers, and in many cases, all of that "stuff" becomes too much to store at home. The storage business is a resilient one and can thrive in nearly any type of economy. In recessions, people downsize and need a place to store their things, and in a booming economy, spending picks up and adds to the "storage of stuff" problem. Thus, analysts consider this type of business recession-resistant. Currently, the stock is paying an attractive 2.7% yield.
Caterpillar (CAT)
Stock price as of Jan. 20: $249.71
Caterpillar is another staid member of the old-fashioned Dow Jones Industrial Average, joining 30 years ago in 1991. The average consumer may know that Caterpillar makes machinery like bulldozers, but the company is much more than that. In fact, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel-electric locomotives, diesel and natural gas engines, and industrial gas turbines, to the tune of a whopping $51 billion in revenues in 2021 alone, up 22% over 2020. With a solid dividend yield of 1.95% and a product line that should benefit from a global economic recovery, Caterpillar could be a "boring" stock to watch for the long run.
American Water Works (AWK)
Stock price as of Jan. 20: $151.54
When it comes to "boring" stocks, utilities are usually at the top of the list. Utilities provide the basic services that all Americans need, such as water and power, and they often aren't popular with consumers, as they issue bills every single month with charges that seem to consistently rise. From an investor's perspective, however, this is what makes utilities attractive to invest in. By providing services that all people need, utilities generate a predictable, consistent revenue stream. This may sound boring, but it puts money directly into investors' pockets.
American Water Works is the largest publicly traded water and wastewater utility company in America. The need for clean water will always be there, and in the event of water shortages, prices will go up, which benefits investors. The stock has been a long-term, consistent winner and it currently pays a dividend yield of 1.74%.
Chevron (CVX)
Stock price as of Jan. 20: $180.90
Unlike most stocks on this list, Chevron actually had two boom years in 2021 and 2022, rising 38.96% and 52.95%, respectively. These are big gains for a company that's traditionally valued for its stability and the size of its large dividend. However, analysts still have a consensus "buy" rating on the stock, and if you're looking for consistent income, Chevron's a good choice. Even with the rise of electric vehicles, demand for oil remains huge, and the company's cash flow sustains a hefty 3.17% current dividend, making Chevron a great source of equity income.
Disney (DIS)
Stock price as of Jan. 20: $103.48
The Walt Disney Company may make a more exciting product to most people than companies like 3M or Caterpillar, but it's still considered a reliable, "boring" stock. Disney could be a stock to take a look at because it is on the cusp of some big changes - and it has also struggled mightily through the pandemic. In Nov. 2022, the Disney board of directors booted pandemic-era CEO Bob Chapek and restored his famed predecessor Bob Iger, who ran the company solidly for 15 years. With the stock down about 44% in 2022 alone, this may be a good time for long-term investors to take another look at one of the most beloved "boring" companies on Wall Street. Under Iger's leadership, shareholders will no doubt be looking for recoveries across all of Disney's popular consumer segments, from feature films and streaming to theme parks and cruise ships.
NRG Energy (NRG)
Stock price as of Jan. 20: $32.21
NRG Energy is another utility, like American Water Works, that may sound boring but that could be a good choice for your portfolio. With a current yield at a whopping 4.51%, NRG Energy puts a lot of money in investors' pockets every year. But the power industry's leading company has a lot more going for it looking forward than looking back. Under the Biden administration, more federal money is being allocated to clean energy generation. NRG Energy may benefit from this global push, as the company has three renewable energy plants and is looking to take advantage of this fast-growing area. Even if the Democrats lose power in Washington in coming years, the move towards renewables looks set to continue on a global basis.
Microsoft (MSFT)
Stock price as of Jan. 20: $240.22
Microsoft is another of a large gang of "old tech" stocks that in many circles just aren't as exciting anymore, with a new wave of companies like Salesforce.com, Shopify and Square gobbling both headlines and investor interest. Yet, Microsoft is much more than the "boring" old tech stock that only sells Windows software. Microsoft has been moving aggressively into cloud services in recent years, and its earnings are starting to reflect a much higher growth profile, including its venture software for electric vehicles. The company's CEO has recently announced some small layoffs and cautioned investors about a bumpy road for tech companies, but these announcements - and the vicious bear market of 2022 - have only served to give long-term investors an entry point on this long-term, "boring" winner. After dropping about 29% in 2022, the stock now yields 1.17%, not bad for a growth-oriented tech stock.
Lowe's (LOW)
Stock price as of Jan. 20: $204.53
Lowe's is one of the two companies that dominate the home improvement space, along with Home Depot. Unless you're a contractor, there's nothing really exciting about a company that sells lights, screws, flooring, tools and construction supplies. However, the stock has been exciting indeed for investors, gaining about 95% over the past five years - and dropping "only" about 15% in 2022, in the midst of a significant bear market.
Lowe's did well during the heart of the pandemic, posting a return of over 98% in 2020 alone as people stayed home and took on renovation projects. However, the long-term prospects of the company are good as well, as foot traffic continues to rise, and its installation services are generating additional revenue. Lowe's certainly has highs and lows as the housing market expands and contracts, but over the long-run, Americans enjoy being homeowners, and there will always be projects to work on. Lowe's also supports a current yield of 2.08%, offering a decent level of income on top of its growth potential.
Mastercard (MA)
Stock price as of Jan. 20: $376.28
The business of credit card processing may not seem all that exciting. But it sure can be profitable. With about 83% of Americans owning at least one credit card, a company like Mastercard has an entrenched customer base that is likely to continue spending. While short-term blips like the pandemic or a recession can temporarily slow consumer spending, history has shown that it always picks up and reaches new highs. Every time a customer swipes a Mastercard to pay for these purchases, Mastercard generates revenue. This makes Mastercard the poster child for "boring" stocks that can be important to own for your long-term portfolio. Even in 2022, during the midst of a fierce bear market, shares of Mastercard only fell just over 3%.
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Disclaimer: This list of stocks to consider was originally compiled on and is accurate as of January 20, 2023.
This article originally appeared on GOBankingRates.com: 10 Boring Stocks That Are Important for Your Portfolio
