There’s no such thing as a free lunch in the stock market. Today’s top-performing stocks could stumble over the next few years, while stable blue chip stocks could stagnate or sink.
However, investors who plan to hold their stocks for a few years generally fare better than those who hold them for only a few quarters. That’s because the S&P 500 — although it endured some wild swings — has still generated an average annual return of about 10% since its inception. An easy way to ride that long-term trend is to simply invest in an exchange-traded fund (ETF), like Vanguard’s S&P 500 ETF (NYSEMKT: VOO), which passively tracks the index for a low fee.
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But if you still prefer to pick individual stocks — and also want steady dividends — then you should consider these three blue chip plays instead: ExxonMobil (NYSE: XOM), Johnson & Johnson (NYSE: JNJ), and Coca-Cola (NYSE: KO). These three stocks are as close to “sure things” in this unpredictable market, and they’re great stocks to buy, hold, and forget.
ExxonMobil
ExxonMobil, one of the world’s largest integrated energy companies, operates in over 56 countries. Its upstream business extracts oil and natural gas, its midstream business operates more than 16,000 miles of pipelines in North America, and its downstream business refines petroleum products. That scale and diversification helped it consistently grow over the long term, even as oil prices fluctuated amid wars and recessions. That’s why it’s raised its dividend annually for 43 consecutive years and still pays an attractive forward yield of 2.6%.
From 2025 to 2028, analysts expect ExxonMobil’s EPS to grow at a 19% CAGR. Its expansion in Guyana (one of the world’s fastest-growing regions), imports of oil sands from Canada, exports of liquefied natural gas, and its other overseas investments should drive that growth.
ExxonMobil’s stock has already risen more than 50% over the past 12 months, yet it still looks cheap at 14 times this year’s earnings. So if you’re looking for a simple, evergreen energy play that can easily stay ahead of the S&P 500, ExxonMobil checks all the right boxes.
Johnson & Johnson
Johnson & Johnson, one of the world’s largest pharmaceutical and medical device companies, is another reliable dividend stock that has raised its payout annually for 64 consecutive years. It currently pays a forward dividend yield of 2.3%.
