CMG - 3 Stocks That Could Create Lasting Generational Wealth
2024-07-02 13:50:00 ET
If you're trying to build generational wealth, you shouldn't think about getting rich quick. It's all about creating a portfolio of companies that are built to last. On that score, you should keep old favorite Coca-Cola (NYSE: KO) and relatively young Chipotle Mexican Grill (NYSE: CMG) on your wish list, while Hormel Foods (NYSE: HRL) might be worth adding to your portfolio right now. Here's a quick look at each stock.
With a market cap of roughly $270 billion, Coca-Cola is one of the largest consumer staples companies on the planet. Don't underestimate the benefit this has for the company and for investors. For starters, Coca-Cola's business is underpinned by a stable of iconic brands, notably including namesake Coke. Moreover, the company has a global distribution network and the financial firepower to support its brands with advertising. And it's big enough to buy its way into new products and categories over time.
The consumer staples sector is one in which retailers and end consumers are both seen as customers for companies like Coca-Cola. The advantages Coca-Cola generates from its size work to entice consumers into stores and, thus, get stores to buy Coca-Cola products for sale. Small competitors that can't match up often don't get the same shelf space, effectively cementing Coca-Cola's already dominant position. But if the smaller competitors are on to something new, well, they and their hot new product might just end up a part of Coca-Cola. These are the many reasons Coca-Cola is a Dividend King, with over 60 years of annual dividend increases behind it. The dividend yield is roughly 3% today, well above the 1.3% on offer from the S&P 500 Index .
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3 Stocks That Could Create Lasting Generational Wealth