Food and Water: Steady Stocks to Anchor your Portfolio

03/25/2020 5:00 am EST

Focus: CONSUMER

Jimmy Mengel

Editor, Outsider Club

Avoiding panic is one reason I focus mostly on long term dividend stocks. These stocks will anchor your portfolio for years to come. They'll be there when you need them, asserts Jimmy Mengel, growth and income expert and editor of The Crow's Nest.

So please, do not panic. Selling now would be like dumping precious cargo overboard in the middle of the storm. Once the squalls stop and the hurricane subsides, you’ll be left sitting with an empty boat.

This too shall pass. In the meantime, here are two portfolio stocks that should be steady during this gale.

Hormel Foods (HRL) produces and markets various meat and food products in the U.S. and internationally. It produces everything you could imagine.

And I bet that you have at least one of its products in your pantry.  Aside from Spam, the company produces non-pershiable staples like Skippy Peanut Butter, Dinty Moore Beef Stew, and Hormel Chili.

Spam — the much maligned canned meat — got our soldiers through World War II, and would make an obvious addition to any quarantine-ready cupboard.

Most importantly, Hormel is a dividend king and has raised their dividend each and every year for 54 years. They currently yield 2.15%. This is a solid long term stock for panic and for a possible recesssion.

One of my favorite dividend reinvestment (DRIP) position is Aqua America, which was just renamed Essential Utilities (WTRG). This is the second-largest publicly-traded water utility based in the U.S., and serves more than 3 million people in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana, and Virginia.

Last year the company invested nearly $60 million acquiring eight water and wastewater systems, which added approximately 12,000 new customers to its books. Essential has also signed three purchase agreements for other municipal wastewater acquisitions. In total, these acquisitions will serve more than 200,000 customers.

It has just announced its 28th dividend increase in the past 29 years. Even more impressive, Aqua America had paid a consecutive quarterly cash dividend for more than 74 years. It currently yields 2.34%. Essential Utilities will also give you a 5% discount if you buy the stock directly through their DRIP.

Utilities always stay strong during times of trouble. Regardless of what is happening in the markets, people still pay their electric and water bills above all else. These companies also tend to be de facto monopolies.

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