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5 Stocks That Could Be Easy Wealth Builders
Investing can be easy, but not in the way you probably expect. For instance, there's nothing easy about the stock market's stomach-churning ups and downs. But you can make life easier for yourself with consumer-facing blue chip stocks. These companies own brands almost everyone knows, and the stocks are proven long-term winners.
All you need to do is buy these stocks, hold them, and occasionally check in to ensure the train is still on the tracks. How do you find these stocks? Start by looking for long dividend histories. These companies have continued to grow while sharing their profits with investors.
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Here are five timeless examples with bright futures. They won't make you rich overnight, but they are as close to easy wealth builders as you'll find.
1. Walmart
Approximately 90% of Americans live within 10 miles of a Walmart (NYSE: WMT). The company's massive size and bargaining power with suppliers have earned it a reputation for wide selections and low prices. Walmart is an American success story and the world's largest retailer today.
E-commerce has been a significant disruptor to the retail industry over the past 20 years, but it hasn't stopped Walmart. The company's massive supply chain and store footprint have helped it compete online, becoming the second-largest online retailer in the United States.
Walmart has steadily grown for decades, fueling 51 consecutive annual dividend increases. Consumer spending is the foundation of America's economy, so Walmart's business should remain strong for the foreseeable future.
The dividend is still only a third of the company's estimated 2024 earnings, which should leave no doubt about its ability to continue paying a growing dividend and building wealth for shareholders.
2. Coca-Cola
Simple products tend to have staying power. Just ask Coca-Cola (NYSE: KO), the world's largest non-alcoholic beverage company, whose namesake product built the company in the 1800s. It's a global empire of soda, water, coffee, and juice brands sold in millions of stores, vending machines, restaurants, and other points of sale.
The company is famous for its dividends, which have increased for 62 consecutive years. Coca-Cola's dividend payout ratio remains healthy at 68% of 2024 earnings estimates.
Thanks to population growth, price increases, and product innovation, Coca-Cola's profits and dividends keep growing. This formula has worked for generations, and it's hard to see it changing anytime soon. The world's beverage market is so fragmented that Coca-Cola can slowly increase its market share seemingly endlessly. The business is only growing at a mid-single-digit rate, but it's as good a bet as any to still be around another 100 years from now.
3. Lowe's
Housing is central to American culture. The country's residential real estate is worth trillions of dollars, creating a massive market for Lowe's (NYSE: LOW).
The company is America's second-largest home improvement retailer, behind Home Depot. The two companies have coexisted peacefully in a market large enough for multiple winners. And, despite 62 consecutive annual increases, Lowe's dividend is still only 38% of its estimated 2024 earnings.
Lowe's sells to professional contractors and do-it-yourself homeowners. People continually remodel their homes over time, and there's a housing shortage in the United States, estimated at 4.5 million homes. Therefore, it seems likely that Lowe's will continue to thrive.
Analysts believe Lowe's will grow earnings by 10% annually (on average) over the next three to five years, making the stock an easy wealth builder to buy and hold.
4. McDonald's
There aren't many brands as iconic in America as McDonald's (NYSE: MCD), which has expanded to become a worldwide juggernaut in the restaurant business.
People know McDonald's for its food, but there's a brilliant business model beneath the surface. McDonald's uses a franchise model to open restaurants, frequently owning the land and buildings. The result is a steady stream of profitable revenue from rent, royalties, and franchise fees.
Steady profits have produced 49 years of dividend growth, putting McDonald's on the doorstep of becoming a Dividend King, like some other companies on this list.
Today, McDonald's has more than 40,000 restaurants in more than 100 countries. Management wants to expand to more than 50,000 locations by the end of 2027, so this company's proven recipe for growth is poised to continue delivering for investors.
5. Procter & Gamble
Things like toothpaste, soap, and laundry detergent are consumer staples, necessities that almost everyone buys without thinking twice. That sums up Procter & Gamble (NYSE: PG), a conglomerate that owns dozens of well-known household brands, including Tide, Old Spice, Swiffer, Crest, and many more.
Household products are a tricky business. Procter & Gamble competes with cheaper generic brands but has thrived on its brand power built on product quality and effective marketing.
People don't easily cut household staples from their budgets, so Procter & Gamble is a durable business with a fortress-like balance sheet and a modest 58% dividend payout ratio (based on 2024 earnings estimates). This Dividend King has 68 consecutive dividend increases to its name, the longest streak of any stock on this list.
Procter & Gamble doesn't grow very fast; analysts estimate the business will chug along, growing earnings at a mid-single-digit rate. But if you're looking for an easy wealth builder, consider Procter & Gamble.
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Justin Pope has positions in Coca-Cola. The Motley Fool has positions in and recommends Home Depot and Walmart. The Motley Fool recommends Lowe's Companies. The Motley Fool has a disclosure policy.
