In theory, to do better than the market does over long periods, there is a benefit to balance in an equity portfolio. This takes into account the fact that fast-growing companies with fast-rising stocks tend to be volatile, both in earnings and share price. Companies with modest, unspectacular and steady growth coupled with solid balance sheets usually have stocks that rise (and fall) modestly and slowly. These companies also often pay dividends, which is a cash distribution safety net for equity investors.
[in-text-ad]

24/7 Wall St. has put together a list of well-known, mostly very large, publicly traded corporations that are a combination of safe harbor stocks and stocks of powerful tech firms. The tech stocks rose rapidly over the course of the decade-long bull market. Almost all the companies on the list have longer-term proven success and prospects. Most dominate their industries and stand ahead of their competitors, both in market share and financially.

The Solid and Steady Old-World Companies

Nike Inc. (NYSE: NKE) is basically a running shoe company founded in 1964 that expanded into the athletic apparel business. It has become the global leader in the industry. Among the benefits Nike has is that the appetite for casual apparel does not fluctuate with the economy a great deal. Its only real competitor is Germany’s Adidas. Nike’s revenue has been close to flat at $38 billion for the past four years. Its EBITDA has dropped slightly over the same period, but not enough to be cause for long-term concern. Nike has steadily paid a dividend of $0.98 per share. It has over $8 billion in cash. The stock is up 100% in the past five years, compared to 75% for the S&P 500.

McDonald’s Corp. (NYSE: MCD), founded in 1940, is the largest fast-food company in America and has a footprint around the world with over 38,000 locations. A number of other casual dining operations, from Subway to Starbucks to Burger King, have taken a run at McDonald’s leadership. None has been entirely successful. Revenue has been relatively steady in the past three years at just over $21 billion. McDonald’s has returned billions of dollars back to shareholders via share buybacks and dividends. Currently, the $5 dividend represents a 2.38% yield. The stock is up 123% in five years.

Verizon Communications Inc. (NYSE: VZ) is one of the two largest telecom companies in the United States. The other is AT&T. Verizon, founded in 1983, has over 150 million wireless subscribers, over 13 million FiOS fiber to the home customers and a media and advertising unit. Revenue has risen modestly over the past three years to $131 billion.

Verizon has a dividend of $2.46, which is a yield of 4.14%, one of the highest among America’s 50 largest public companies. Verizon’s shares are up 28% over the past five years, compared to that 75% for the S&P 500. Verizon is expected to get a spurt of growth as American consumers and businesses convert to the 5G ultrafast wireless standard.

Walmart Inc. (NYSE: WMT) is the world’s largest retailer. Founded in 1945, it has over 11,500 stores. It employs 2 million people around the world, and of these, about half are in the United States. Walmart’s revenue has risen modestly over the past four years and in the most recently reported fiscal period totaled $542 billion.

Walmart shareholders have worried for years that Amazon.com would continue to erode its revenue as people moved shopping online. A surge in sales at Walmart.com during the COVID-19 pandemic has proven otherwise. Walmart’s shares are up 103% in the past five years. Its dividend of $2.16 represents a 1.58% yield.

The Technology Titans

Apple Inc. (NASDAQ: AAPL), founded in 1977, is the most valuable company in the United States. It has a market capitalization of $2.1 trillion, after a share price run-up of 339% in the past five years, most of which came in the final two years of the period. Apple’s revenue, along with its bottom line, has risen almost continuously over the past decade and in its most recent fiscal year reached $275 billion.

Apple’s flagship product continues to be the iPhone, which is a decade old. Sales of its Macs, iPads and smartwatch products are other large contributors to revenue. Recently, Apple’s services business has become its fastest growing. The segment includes its e-commerce, media and cloud businesses. Apple has a $3.28 dividend, which represents a 0.66% yield.

[in-text-ad]
Founded in 1994, Amazon.com Inc. (NASDAQ: AMZN) now is America’s largest e-commerce company and the world’s leader in cloud computing. It is a rare instance in which one public corporation has two such large and successful divisions under one umbrella. It is the third most valuable company in the world, with a market capitalization of $1.7 trillion.

Amazon dominates the e-commerce business in the United States. In its most recent quarter, it posted revenue of $88.9 billion, up 39%. North American sales were $55.4 billion. Amazon Web Services, its cloud operation had revenue of $10.8 billion. With an operating income of $3.6 billion, it is incredibly profitable. Amazon’s stock has risen 534% in the past five years.

Microsoft Corp. (NASDAQ: MSFT), founded in 1975, has grown from its position as the world’s leading operating system providers for personal computers and servers to a diverse technology operation. Much of its growth recently has come from its cloud computing segment, primarily under the Azure brand. It also has had a sharply rising success in hardware sales. Microsoft has had a dominant position in gaming for decades through its Xbox brand. Its Windows and Office businesses continue to dominate consumer and enterprise computing operating systems.

Microsoft is the second most valuable company in the United States, with a market cap of $1.74 trillion. Its stock is up 384% in the past five years. Its dividend of $2.04 represents a 0.9% yield.

Financial Giants

Visa and Mastercard control the global credit card market. Which has been more successful? Consumers and vendors have made a stark choice. Visa Inc. (NYSE: V) is a stronger company. It holds a 60% share of the credit and debit card market, followed by Mastercard with 30%. Visa’s success has made it the eighth-most valuable company in America, with a market cap of $459 billion, more than any other financial firm. Visa does business in almost 200 countries.

Even as companies like Apple get into the online and digital payment systems sector, Visa has decades-old relationships with hundreds of millions of customers, millions of vendors and thousands of banks. That is what investors call a “wide moat.” Visa’s shares are up over 208% in the past five years. It pays a dividend of $1.20, which is a 0.57% yield.

JPMorgan Chase & Co. (NYSE: JPM) is run by the dean of financial institution executives, Jamie Dimon. He has held the job since 2005 and is arguably among the most respected American executives of the 21st century. JPMorgan is widely considered the best run of the large U.S. banks. Its shares are up almost 65% over the past five years, outpacing those rivals. Its managed net revenue in the second quarter was $33.8 billion, up from $29.5 billion in the same period of the year before.

The Big Risk With the Big Balance Sheet

Zoom Video Communications Inc. (NASDAQ: ZM) is not a product of the pandemic, but its success most certainly is. The video conferencing company has seen a remarkable surge in the use of its products. It remains to be seen if this success continues if and when the spread of COVID-19 slows and people begin to return to offices. Its other challenge is that it faces a number of well-regarded competitors, some of which also have large installed customer bases. These are sometimes called “Zoom killers.”

Zoom demonstrated its dominance in the industry when it reported its most recent quarterly earnings. Revenue rose 335% to $664 million. As Zoom tries to prove its staying power, it has nearly $1.5 billion in cash and securities, an impressive bankroll. Its stock is up 573% this year to a market cap of $129 billion. If video conferencing remains a backbone of 21st century communications, Zoom should continue to prosper.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.