Although traders continue to be laser-focused on hyper-growth stocks for substantial gains, astute investors also love dividend holding stocks. While growth stocks offer high rewards, most of them come with higher risks. That’s why it’s important for investors to diversify and also buy dividend-giving stocks to ensure stability with dependable gains during market volatility.
Stability and dependability are more important to some investors than others. But companies that can continue to grow their cash flows and see their revenue and earnings tick up consistently over time are among the stocks I think investors should be more interested in right now.
There are plenty of speculative plays in the market for those looking to add risk to consider. However, these following blue-chip stocks provide the kind of growth most are looking for, with far less risk.
Let’s dive in.
PepsiCo (PEP)
Headquartered in New York, PepsiCo (NASDAQ:PEP) is known for its wide range of beverage products. Pepsi is also a snack giant, continuing to expand its portfolio of affordable luxuries for consumers around the world.
This diversification strategy has paid out well, with many now viewing Pepsi as more a play on the broader consumer discretionary sector than as a pure-play on the beverage space (as competitor Coca-Cola (NYSE:KO) is often viewed.
And from a cash flow perspective, it’s harder to find a better option. This diversified company has relatively high margins, driven by some of the best pricing power in its segment.
And unlike Coca-Cola, PepsiCo owns its production facilities, enhancing profitability despite high costs. In recently years, the company has posted strong bottom-line growth and dividend performance.
Thus, for those looking for a long-term consumer discretionary stock to own, I think Pepsi is a great pick here.
Berkshire Hathaway (BRK-A,BRK-B)
In 1965, Warren Buffett came into the game as Chief Executive Officer (CEO) of Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B). And ever since, the firm has been known for its strategic investment prowess and ability to pick winners. With a long-term average compounded capital appreciation near 20%, Berkshire Hathaway is clearly one of the best examples of how investors can consistently beat the market over long periods of time.
Of course, given the firm’s size, there are now questions as to whether this can continue. Nevertheless, the company’s focus on paying reasonable prices for excellent businesses (rather than excellent prices for decent businesses) sets it apart.
The company’s portfolio is what I’d call recession-resistant, and is one long-term investors should consider. The company owns a range of ordinary businesses, and a selection of high-growth stocks (some tech) as well. It’s a portfolio that can stand the test of time. So, for investors looking to do the same, this is a stock to load up on during any major dips.
Occidental Petroleum (OXY)
One of the companies Berkshire Hathaway also puts its money in is Occidental Petroleum (NYSE:OXY). Unlike its peers in the utilities sector, OXY stock has remained resilient despite industry challenges. This is the best time to add Occidental Petroleum. And that’s not only because Buffett is betting so heavily on this stock.
In Q1 of 2024, the company reported strong production of 1,172 Mboed and $2.4 billion in operating cash flow. OXY has expectations of $1 billion more in annual free cash flow by mid-2026, supported by potential oil price gains. Also, the company is prioritizing debt reduction and expanding into low-carbon projects. This includes the TerraLithium extraction and partnerships with TAE Technologies.
With its aggressive acquisition of Anadarko Petroleum in 2019, Buffett’s backing is also a strong reason to put faith in OXY stock. In my view, this is just one of Buffett’s long-term holdings that are worth adding as independent positions as well as doubling down on.
On the date of publication, Chris MacDonald 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.