One reason to consider stocks for investors over 30, is that age begins the transition toward a more risk-off portfolio aimed at retirement.
The ultimate objective is to consistently beat index returns and create long-term wealth. Warren Buffett has been famously quoted saying that the “best holding period is forever.”
Another secret to wealth creation in the markets is starting early. The idea of this column is therefore to focus on stocks for investors over 30 to buy and hold.
There are high-quality names among growth stocks to buy and hold. I am however focused exclusively on blue-chip stocks for investors over 30. These stocks will create value through consistent dividends and capital gains. I can also say with some conviction that a portfolio of these stocks can beat index returns.
Let’s talk about seven blue-chip dividend stocks for investors over 30 to buy and hold.
Chevron Corporation (CVX)
Chevron Corporation (NYSE:CVX) is possibly the best stock from the sector for investors over 30 to buy and hold.
An obvious reason to like Chevron is its investment-grade balance sheet. In addition to that, Chevron has robust cash flow generation capability. This is supported by assets with an attractive break-even.
To put things into perspective, Chevron reported operating cash flow of $13.7 billion for Q3 2022. If oil trades around $80 per barrel, the company is positioned for annual operating cash flow of approximately $35 to $40 billion.
Robust cash flows will ensure that dividends are secure. Share repurchase is also likely to remain aggressive. Furthermore, Chevron is positioned to make big investments. The company has already planned an annual capital expenditure of $15 to $17 billion for the coming years.
Newmont Corporation (NEM)
Newmont Corporation (NYSE:NEM) is among the stocks for investors over 30 to buy and hold. After trending lower through 2022, the stock is poised for a reversal.
Gold has already bounced back with the Fed signaling slower rate hikes. A potential recession in 2023 might also imply a shift toward expansionary policies. Continued geopolitical tensions are also positive for the precious metal. I would therefore hold gold or gold mining stocks in my portfolio.
From a long-term perspective, there are multiple reasons to like NEM stock. First, the company has an investment-grade balance sheet and a robust cash buffer. The current dividend yield of 4.7% is attractive and dividends are sustainable.
Newmont also has a strong asset base with 96 million ounces of proven reserves. The company maintains stable production through the 2040s. With visibility for decline in all-in-sustaining-cost, Newmont is positioned to report strong cash flows.
Among pharmaceutical stocks, Pfizer (NYSE:PFE) is worth holding in the core portfolio. Even after a rally in the recent past, the stock trades at a forward price-earnings ratio of 7.7. A dividend yield of 3.2% is a bonus for investors.
Last year, Pfizer generated $29.9 billion in free cash flows. The big bump-up in cash flows was largely attributed to the covid-19 vaccine. Even for the year, cash flow visibility is robust.
There are two reasons for mentioning the cash flow upside. First, Pfizer has used financial flexibility for inorganic growth. The company expects $25 billion in risk-adjusted revenue from new business development by 2030.
Furthermore, Pfizer has a strong pipeline of late-stage drug candidates. The improved financial flexibility has translated into higher investment in research and development. As new drugs are commercialized, revenue growth is likely to remain decent. Overall, PFE stock is undervalued and has a portfolio that will deliver sustained cash flows.
Apple (NASDAQ:AAPL) stock has been a value creator on a consistent basis. With technology stocks underperforming, AAPL stock has been subdued in the last 12 months. I believe that it’s a good accumulation opportunity with the stock trading at an attractive forward price-earnings ratio of 22.9.
One reason to like AAPL stock is the dividend growth potential. Apple currently offers an annualized dividend of 92 cents. For FY2022, Apple reported operating cash flow of $122 billion. Considering the cash flow potential of the business, dividend growth will sustain in the coming years.
Further, with nearly $170 billion in cash and equivalents, there is flexibility to make big investments in innovation. With new products, the wearable, home, and accessories segments are likely to see healthy growth. iPhone segment sales will be driven by 5G adoption.
There has also been continued speculation about Apple’s entry in the electric vehicle business. Latest reports indicate that the company’s self-driving car launch has been pushed to 2026. With the target to sell consumer models at under $100,000, the outlook seems bright.
Lockheed Martin (LMT)
Lockheed Martin (NYSE:LMT) has outperformed the index for year-to-date 2022 with returns of 35.8%. This was anticipated as geopolitical tensions imply higher defense spending globally. LMT stock also offers a generous annual dividend of $12.
For Q3 2022, Lockheed reported revenue of $16.6 billion. For the same period, the company’s operating cash flow was $3.1 billion. Strong cash flows will ensure that dividends sustain. As a matter of fact, the company increased dividends by 7% in Q3.
Lockheed reported an order backlog of 140 billion. The order backlog has swelled on a quarter-on-quarter basis. With an increase in defense spending in Europe, the backlog will continue to increase. This provides Lockheed with clear cash flow visibility.
The company has also been investing in new technology. This includes hypersonics, directed energy, and autonomy, among others. Innovation will help Lockheed maintain a competitive edge. With these factors, LMT stock is among the quality stocks for investors over 30 to buy and hold.
Tesla (NASDAQ:TSLA) stock has plunged by 56% year to date.
There have been broader concerns for the industry related to supply chain issues. Specific to Tesla, the markets have not been impressed with the production and deliveries.
However, I remain bullish for the long term. It’s expected that by 2030, electric vehicles will represent 60% of new vehicles sold. Even amidst competition, Tesla is likely to remain a market leader.
An important point to note is that Tesla reported operating cash flow of $11.4 billion for the first nine months of 2022. The company already has an annual OCF potential of $15 billion.
Further, with cash and equivalents of $19.5 billion, Tesla is well-positioned to invest in new factories globally. Elon Musk has an ambitious target of producing 20 million electric vehicles annually by 2030.
In the next 12 to 24 months, I believe that Tesla is likely to see accelerated vehicle deliveries. This will be supported by the potential launch of Roadster, Cybertruck and Tesla Semi.
Panasonic Holdings (PCRFY)
With significant headroom for EV penetration globally, battery stocks are among the attractive long-term bets. Panasonic Holdings (OTCMKTS:PCRFY) stock looks attractive at a forward price-earnings ratio of 12.5.
Panasonic has some big investment plans and that’s one reason to be bullish. The company has commenced construction of a $4 billion plant in Kansas. Additionally, another $4 billion investment is planned for a plant in Oklahoma. Panasonic and Toyota (NYSE:TM) joint venture are also mulling a new battery plant in Japan. These investments are likely to translate into revenue and cash flow upside in the next few years.
Another reason to like Panasonic is its investment in research and development. The company has 445 patents in the solid-state battery space. With innovation backed by investment in new battery plants, the company is likely to maintain or potentially increase its market share.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.