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The 10 Best Stocks to Hold Forever

Around our research office, we just call them our "Forever" stocks. We've talked about them so much over the past few months, the nickname is just easier. Everyone here knows exactly what we're talking about.

Put simply, this is the set of stocks you can buy today and hold for the rest of your life. When you own them, you no longer need to worry about things like inflation or deflation... bear markets or recessions... flash-crashes or rising interest rates.

For example...

"Forever" Stock #8 -- Intel (Nasdaq: INTC) -- has turned every $20 invested in 1972 into $32,000 today. Just $630 invested back then would be worth more than $1 million. This is one of the most epic stock-market runs in history -- and it happened despite the '87 crash, the "Dot-com" bubble, and the Great Recession.
"Forever" Stock #4 -- Reaves Utility Income (AMEX: UTG) -- has outperformed "regular" stocks nearly 10-to-1 in its lifetime. And it has only been around since 2004! It has returned nearly 11% per year since its inception... and its dividend grew 28.9% along the way. In total, investors have received more than 100 consecutive dividends from this company.
Another "Forever" stock has raised its dividend 67.4% since 2008... and buys back billions of dollars worth of its shares. In 2011 alone the company repurchased $5.4 BILLION of its own stock. Since being spun-off from its parent company in 2008, this company has bought back nearly 20% of the outstanding shares, which helps support the share price in just about any market.

This sort of "worry-free" performance is exactly the reason many of the world's richest investors, politicians, and businessmen have owned shares of these stocks for decades, using them to obliterate the market.

We're talking about investors like Warren Buffett, Carlos Slim, and Goldman Sachs, along with John Kerry and dozens of other Congressmen.

But it's not just the elite making money off these types of ideas.

People just like you have been making money from these types of stocks for decades...

George A. from Weatherford, Oklahoma told us he's held shares of General Electric for 45 years. During that time, his holdings have turned from $27,000 to $108,000... while also paying him "tons" of dividends.

Arthur R. of Sandy Springs, Georgia told us he invested in 200 shares of Automatic Data Processing at just $8.00 per share. After holding about five years, he sold at $59.90. His profit? Through splits, his original $1,600 investment turned into $106,000 when Arthur sold.

Tony R. of Reading, Massachusetts bought $2,000 of Esso -- Exxon's predecessor -- more than 50 years ago. "I never purchased any more, I just reinvested dividends. For years it was the only stock I owned."

Tony said that stake topped out at more than $100,000.

Now, I'll be honest. There's a major caveat. You can't just buy any stock, hold it forever, and expect to come out ahead. The market is littered with Enrons, Worldcoms, even General Motors. Holding forever didn't matter a lick with them.

That's why our staff have put so much time, effort, and money into completing our list of 10 "Forever" stocks. We can never guarantee a stock will rise, but the ten "Forever" ideas below represent our best ideas for holding... and profiting... for the long term.

Note: Our research team think holding stocks like those profiled below for the long term is one of the best ways to amass wealth. But that doesn't mean anyone should just blindly hold. There are never any guarantees in investing, and these securities are no different.

The 10 Best Stocks to Hold Forever
1. Brookfield Infrastructure (NYSE: BIP) 6. JPMorgan Alerian MLP (NYSE: AMJ)
2. Google (Nasdaq: GOOG) 7. WisdomTree Emerging Mkts (NYSE: DEM)
3. Philip Morris International (NYSE: PM) 8. Intel (Nasdaq: INTC)
4. Reaves Utility Income (AMEX: UTG) 9. Markel (NYSE: MKL)
5. MasterCard (NYSE: MA) 10. CPFL Energia (NYSE: CPL)


(1.) Brookfield Infrastructure L.P. (NYSE: BIP)

The first of our "Forever" stocks is one we like to call our "Rockefeller" idea. Most people know Rockefeller became rich via his company, Standard Oil. And while we want to invest in the same sort of business that he did, this pick has nothing to do with oil.

But that's fine by me, because when you look closely at exactly WHY Rockefeller got rich, you realize Standard Oil didn't turn Rockefeller into a billionaire simply because it was in the oil business.

No. Standard Oil made Rockefeller the richest man in history because the company held a monopoly in its market.

Brookfield Infrastructure owns dozens of monopolies... and they have the government's blessing. How is that possible?

Frankly, there is no other choice.

As you can tell by the name, this partnership owns infrastructure assets -- electric transmission grids, ports, railroads, coal terminals, and timberland. These unique assets aren't something another competitor can just build next door.

That means Brookfield enjoys monopoly status in most of its markets... but it doesn't mean it can charge whatever it wants. Most of its fees are locked in by regulations or contracts. This lets the partnership earn a solid return that's usually tied to inflation.

In total, roughly 80% of the partnership's revenues are under contracts or are regulated. Meanwhile, those practically guaranteed revenues are coming from one of the most compelling portfolios I've ever seen.

The partnership has a stake in electric grids in Chile. It holds railroads in Australia... ports all over Europe... coal facilities in Australia... toll roads in South America... and timberland in the United States and Canada.

We can only think of one, maybe two, other places where you can invest in a stable group of monopolistic holdings this broad from all over the planet.

And to be fair, we didn't find this unusual stock on our own. It was discovered by Amy Calistri, who spends just about every waking moment searching for stable, high-yielding securities to include in her premium monthly newsletter, The Daily Paycheck.

Amy first discovered this stock back in February of 2010, and readers who took her advice and purchased when she did have already posted gains of more than 180% on the stock.

But we think this stock still has plenty of upside left.

And as you would expect from ownership in a basket of monopolies, these holdings throw off solid cash flows. In 2010, the partnership earned funds from operations (FFO) per unit of $1.79. Then, in 2011, that figure was $2.41 per unit -- clobbering the previous year's mark.

[Note: Organizations such as real estate investment trusts, tanker companies, and master-limited partnerships often use "funds from operations" as a basis of their performance instead of regular cash earnings. That's because they have large depreciation expenses on their assets. Depreciation is a non-cash charge. It lessens earnings, but it doesn't actually take away cash used to expand the business... or pay distributions.]

BIP has only been around since 2008. The security went public about the time the downturn started. Yet despite the rough timing, the fund has shown strong gains since it went public.

Brookfield's management's stated goal is to return 12-15% per year over the long term.

Part of that comes from a solid dividend.

Right now BIP pays $0.43 per unit each quarter. That's a 15% increase over 2012 and gives the units a yield of around 4.5%.

Over the long term, BIP's growth will come from new infrastructure purchases, but also the partnership's $452 million backlog of growth projects at the end of 2012. These include expansion projects for its Australian coal terminal and a biomass terminal at its UK port.

With a $6 billion market cap, Brookfield's $500 million in expansion projects is substantial. In fact, the partnership has said it may even raise distributions more than its 3% to 7% annual target if expansion continues as planned.

Risks to Consider: To help expand its portfolio, Brookfield does leverage about 45% of its assets. The majority of this leverage is at a fixed rate, but rising interest rates could hamper the partnership's expansion efforts.


(2.) Google (Nasdaq: GOOG)

This "Forever" stock is one of the most dominant companies on the planet... and it hasn't escaped the grasp of some of the best investors in the world.

Legendary investment firm Fidelity owns 11.800 million shares worth over $9.5 billion. Goldman Sachs owns nearly another 2.5 million shares. Two dozen Congressmen also own the stock... Rodney Frelinghuysen (R-NJ) owns at least $150,000 worth, according to the Center for Responsive Politics.

So what do they all see in Google? It may be the same thing Warren Buffett's second in command -- Charlie Munger -- sees...

"Google has a huge new moat," Munger said. "In fact I've probably never seen such a wide moat. Their moat is filled with sharks."

Munger is famous for loving companies with wide "economic moats" -- advantages that keep competitors from gaining territory against a business.

And Google has plenty of those...

It's the most dominant company on the entire Internet. Depending on who you cite, it owns no less than a 65% market share of online search, and possibly upwards of 90%.

Moreover, it offers email... online documents... mapping tools... and dozens of other free utilities -- all in an effort to get its advertising platform in front of more eyeballs.

Its web advertising platform owns a nearly 40% (and growing) market share... about triple its nearest rival.

In 2012, the company earned a total of $43.7 billion in advertising revenues... up almost 20% from a year earlier.

But Google's profitability is what stands out the most. In fact, the company is ranked #103 on the latest Fortune 500 list by revenues... but #41 if you rank all the companies by profits.

That's helped the company build up a cash stockpile of more than more than $60 billion in cash on its books... or more than $180 PER SHARE, based on recent financial data.

Investing in a tech stock like Google on the long-term is a little riskier than say, Coca-Cola (NYSE: KO). You simply can't be sure exactly where the business -- or its products -- will be a decade or more from now.

However, given the dominant position of Google and its ability to be a leader in all aspects of the online world, I'd feel safe investing in this company for the long haul.

Risks to Consider: Google has faced increasing scrutiny from regulators in the U.S. and abroad over privacy concerns, but that should not end up changing the long-term outlook.


(3.) Philip Morris International (NYSE: PM)

First things first, we understand not everyone likes investing in cigarette manufacturers. That's fine. However, Philip Morris International is one of the most solid stocks on the planet, and we think it can serve investors well as a "Forever" holding.

Philip Morris International is the world's second-largest tobacco company, behind only China National Tobacco, and holds almost 16% of the non-U.S. market. PMI's brands include seven of the world's top 15 names, including Marlboro, the number one cigarette brand worldwide.

This company is a spin-off of Altria's (NYSE: MO) cigarette business outside U.S. borders. Altria continues to sell its brands, including Marlboro and Merit, in the United States, but that business is slowly shrinking.

Outside the U.S., it's a different story.

Philip Morris International saw revenues increase more than 15% from the end of 2010 to the end of 2012.

Some overseas markets offer growth opportunities in the cigarette industry because of their growing populations and looser restrictions on tobacco marketing. Estimates are that there will be 1.4 billion smokers globally by 2020, up from 1.3 billion today, even if the percentage of the population that smokes declines 1% annually.

That dependable business is exactly what you like to see in a "Forever" holding... but it's far from the only reason to like the stock.

We think Philip Morris International is the most shareholder-friendly company we've ever seen. Since 2008 it's raised its dividend 84.8%... from $0.46 per share every quarter to $0.85.

That gives the stock a yield of roughly 3.5%, but the dividend is likely to rise over time.

Meanwhile the company has repurchased more than 450 million shares (more than 20% of all shares outstanding, worth $23 billion).

This sort of "Forever" investment hasn't been lost on the big names either. Philip Morris is owned by a staggering 13 members of Congress. James Sensenbrenner Jr. (R-WI) reports that via his wife, he has a stake of up to $1,000,000 of the stock.

And Representative Sensenbrenner and his wife could shake hands with the world's richest man -- Mexican telecom magnate Carlos Slim -- at the company's annual meeting. That's because along with a couple dozen members of Congress, Mr. Slim sits on Philip Morris International's Board of Directors... and also has a stake -- owning more than 14,800 shares worth $1.3 million.

With a stable business, the most valuable global brands, and shareholder-friendly practices, Philip Morris International is everything we look for in a "Forever" stock.

Risks to Consider: Though somewhat mitigated by its global position, Philip Morris faces regulatory risks and risks from litigation in several of its markets. Also, if exchange rates were to become unfavorable the company's global position creates some currency risks.


(4.) Reaves Utility Income Fund (AMEX: UTG)

Reaves Utility Income is a fund whose job is simple -- invest in the most stable utility stocks on the earth and pay investors a fat yield.

The $598 million fund owns dozens utilities from all over the world -- including telecoms in New Zealand, electric companies in Brazil, and energy businesses in Wisconsin.

Electric utilities make up the bulk of the portfolio at roughly 61% of its investments, followed by telecoms (38%) and pipelines (13%).

And although it invests all around the world, the bulk of its holdings are in the United States. You'll recognize many of the names it owns. Some of the biggest stakes include AT&T (NYSE: T), Duke Energy (NYSE: DUK) and Verizon (NYSE: VZ).

In total, about 88% of the fund's assets are in U.S. common stocks and 12% rests in foreign holdings.

To boost the yield it can pay investors, UTG does leverage its holdings -- up to 34% of assets. As you'd expect, that makes the shares more volatile than typical utility holdings. UTG was the single one of our 10 "Forever" stocks that fell more than the S&P 500 in the downturn. Of course, when the bull market returned, that stock came back with a vengeance... more than doubling the S&P 500 in the following year.

In fact, it's returned 11% per year since it's inception in 2004... along with dividend growth during that time of 29%. And according to the fund, every $1,000 invested at the fund's inception would now be worth about $2,500. Our own Amy Calistri of The Daily Paycheck picked up the fund back in late 2009. She is showing a gain of about 50%.

In total, the fund has paid more than 90 consecutive dividends and yields around 6.0%, based on recent prices. UTG makes monthly payments of $0.13 per share. We expect that amount to rise slowly going forward.

One note... this fund is a bit of a secret. It trades an average of just 90,000 shares per day. That's about what Apple (Nasdaq: AAPL) trades in two minutes. Because of that, you might want to buy the shares with a limit order, ensuring you get your expected price.

Risks to Consider: To achieve its above-average yield, the fund leverages nearly 34% of its assets. This does add an element of risk should borrowing costs rise. And if asset values see a marked decline, the fund may be forced to liquidate some positions.


(5.) MasterCard (NYSE: MA)

What do you do when you find a stock with more than a billion of its products in use... that's also owned by Warren Buffett's Berkshire Hathaway (NYSE: BRK-B)... holds $30 per share in cash... and is in the process of buying back $2 billion in stock?

I think you buy it and hold forever.

That's exactly what I've found with MasterCard.

You've no doubt heard of this company, unlike some of our other "Forever" stocks. In fact, you might hold one of their one billion cards in use around the world. In total, MasterCard boasts over a billion total accounts and racks up nearly $3 trillion in transactions each year.

But don't think this is a risky play that's dependent on people paying off their credit card bills. In actuality, MasterCard is simply a "toll" operator.

The company doesn't have anything to do with the debt that investors put on their credit cards -- banks own that liability. MasterCard simply earns a small percentage of each transaction that users make on its cards. In other words, MasterCard makes more money as the number of people around the world using its cards grows.

And right now growth in electronic payments is one of the most unstoppable trends on the planet.

Let's take the United States. According to the Federal Reserve, there are more than 65 billion payments made annually in the U.S. on credit, debit, and prepaid cards. And even in a developed country like the United States -- where card usage is ubiquitous -- the market grew at a nearly 10% annual rate between 2006 and 2009 (the latest data available).

But that's just a taste of the global trend toward electronic payments, and it's only from one of the most heavily developed economies in the world where paying by card is already commonplace. Growth is much, much stronger overseas.

In Brazil, card transactions are up 18% in 2011. Debit card transactions rose 39% in fiscal 2011 in India -- where debit cards outnumber credit cards 10-to-1. And major banks in China have reported annual growth of 65% in debit card usage. The number of credit cards in China is more than quadruple the level in 2006.

And that's just the tip of the iceberg. It's estimated that 85% of payments made around the world are still made with cash or check. That's a big market waiting to be tapped.

Perhaps that's why Warren Buffett's Berkshire Hathaway disclosed it had bought a 216,000-share stake in the company in the second quarter of 2011. And then they "doubled down" -- buying 189,000 more shares.

But this is all just one part of MasterCard's appeal. In addition to tapping into one of the world's strongest growth stories, the company's financial standing is as good as it gets. Its net profit margin was 32% at the time of this writing. On this metric, that makes MasterCard more profitable than 97% of all companies in the S&P 500.

It has no debt. Cash and equivalents total $3.5 billion, about $30 per share. At recent prices, that comes out to approximately 6% of the share price.

Meanwhile, the company's overall share count fell 2% in 2012 and it has more share buybacks approved.

The move toward more credit and debit card payments is unmistakable... and still has years -- if not decades -- to go. We think that makes MasterCard a "Forever" stock.

Risks to Consider: While MasterCard is shielded from credit risk, the company is facing increasing regulations in the U.S. and overseas. Case in point, recent banking regulation lowered the amount MasterCard can charge businesses when a customer uses a MasterCard.


(6.) JPMorgan Alerian MLP Index ETN (NYSE: AMJ)

If you've never heard of master-limited partnership (MLPs)... pay attention.

MLPs have been one of the decade's brightest spots in the stock market. These partnerships own assets like pipelines and storage tanks used to ship and store commodities around the country.

But MLPs usually aren't leveraged to commodity prices -- they simply act as a tollbooth -- earning money for the volume shipped through their pipelines. As long as volume is steady, so too are their cash flows.

So while AMJ -- which holds a basket of MLPs -- is the newest investment in our "Forever" list to hit the market, it also offers some of the greatest potential for steady long-term gains. In fact, the underlying index it tracks has a 20.0% annualized return over the past three years. The index it tracks delivered a 10-year annualized return of 17.3%

Investors have piled into MLPs thanks to their stable "tollbooth" businesses... but also because they are required by law to pay out the bulk of their cash flow to investors or face punishment. That generally gives MLPs high yields of 5% or more. And as the cash these partnerships earn increases, so too do the distributions.

Stable cash flows... high yields... strong annual returns... what's not to like? Well, the fact is that master-limited partnerships are pretty complex when it comes to taxes. In fact, in some circumstances, the distributions they pay can lead to taxes even if held in a tax-deferred account like an IRA.

That's why we like this special "Forever" investment... it gets all the benefits of owning MLPs without the tax headaches.

AMJ is tied to a basket of MLPs. Enterprise Products Partners (NYSE: EPD) makes up the largest stake (15% of assets), followed by Kinder Morgan Energy (NYSE: KMP) (10% of assets) and Plains All American Pipeline (NYSE: PAA) (7% of assets).

As you would expect, this basket of holdings throws off a nice stream of income. The quarterly dividends vary based on what the underlying investments pay... but so far that simply means the payment has increased nearly every quarter.

As we go to press, the notes have paid $2.02 each over the last year, for a yield of roughly 4.5%.

But we think the biggest benefit comes from the lack of tax headaches. Instead of issuing a complex "Schedule K-1" IRS form as most MLPs do, this security takes care of all that. Instead, it issues a simple 1099 form like any other dividend payer.

As a result, you can hold these shares in your tax-deferred accounts. No wonder Forbes.com called it one of "3 Good Buys in MLPs."

One thing to note -- as much as we think holding shares of AMJ will be a great "Forever" investment, you won't be able to hold it for decades. As an exchange-traded note, the security will mature in May 2024.

Risks to Consider: Royalty trusts are are at the mercy of oil and natural gas prices, both of which can be quite volatile.


(7.) WisdomTree Emerging Markets Equity Income Fund (NYSE: DEM)

Here in the United States, we're struggling to see 2% GDP growth... and that's coming out of a major recession... with billions in stimulus spending... and record low interest rates.

The government has thrown trillions of dollars to get the economy jumpstarted, and we're still only seeing moderate growth.

That's not to put down the United States. It's still one of the best places in the world to invest, but limiting your "Forever" investments to only U.S. companies looks to be a big mistake.

But Malaysia's GDP grew at a 6% rate in 2011... Taiwan grew 4%... and Chile grew 6%. Economies like Taiwan, Brazil, Chile and others are simply growing faster than the U.S. economy.

This "Forever" idea is one of the best ways to profit from that trend.

The WisdomTree Emerging Markets Equity Income Fund holds 331 of the highest-yielding stocks from emerging markets all around the world. Taiwan (20% of assets) and China (16%) make up the largest chunk of the portfolio. But in total 17 countries are represented -- including South Africa, Chile, Russia, and Malaysia.

China Construction Bank Corp (OTC: CICHY) makes up the largest holding (8.3% of assets), following by Gazprom OAO (OTC: GZPFY) (6.4%) and Banco do Brasil SA (OTC: BDORY)(3.0%). And since this fund focuses not only on emerging markets, but dividend payers as well, it holds the bulk of assets in financials (27%) and energy (18%).

Dividends do vary dramatically based on what the fund earns from its holdings. As we go to press, the past four quarterly distributions add up to $1.81 per share, giving it a yield around 3.3%.

But it's not the yield that makes this a "Forever" stock. It's the fact that the type of companies that pay yields are typically more steady performers. In still volatile emerging markets, that's important for smoothing out the ups and downs. And so far, it's been paying off.

Since the fund's inception in 2007 through the end of 2011, it's returned 6.3% a year... and that's through a worldwide global recession. For comparison, the MSCI Emerging Markets Index -- the most widely reported gauge for the performance of emerging market stocks -- has returned 1.5% annually during the same time.

The fund charges 0.63% per year, but to have access to a basket of stocks representing what we think is the best way to play emerging markets, it's a small price to pay.

Risks to Consider: Emerging markets and currencies can see steep declines when global markets are volatile. DEM doesn't hedge its foreign currency exposure, meaning it can suffer from both falling asset prices and falling currencies.


(8.) Intel (Nasdaq: INTC)

If we told you we found a stock that for every $200 you invested back in 1972 would be worth $320,000 today, you'd likely think we were late to the party.

But while we don't expect shares of Intel to repeat that same performance... we do think the stock is an attractive "Forever" holding.

Of course, I'm not alone.

In total, more than 40 members of Congress own a stake in the company.

All the big banks own a piece of this company... just like Congress. Morgan Stanley owns 27 million shares. JPMorgan Chase owns 29 million. Bank of America owns 42 million shares. And Goldman Sachs owns over 35 million shares of this stock.

So what are all these investors seeing?

How about a company that's raising its dividends, spending billions to buy back its own shares, making smart acquisitions, and according to investment research firm Morningstar, owns an "stranglehold" on a $30 billion market...?

As you likely know, Intel is the world's largest semiconductor chip maker. Chances are the computer you're reading this on is powered by an Intel chip.

Now, we won't bore you with the technicals of the chip business. The important thing to know is that Intel is by far the largest player in an industry that will still see growth for years to come.

Of course, there is growth in the personal computer market as penetration in emerging markets increases. But the company makes chips for just about any electronic device. In a world that's constantly becoming more connected via cell phones and tablets, this growth is still in the early stages.

Meanwhile, as the largest player in the market, Intel also has an enormous research & development (R&D) budget. That all but guarantees it will continue to be a leader in the semiconductor field.

But we think it's the company's attitude toward shareholders that's most appealing for its status as a "Forever" stock. Its business throws off enormous amounts of cash... and the company is doing everything it can to put that money in shareholders' pockets.

Intel has bought back stock every single year for the past 20 years straight... totaling $87 billion. And since 2005 it has ongoing authorization to buy up to $25 billion in stock. For all of 2011, it bought $14.1 billion worth, and in 2012, it bought $4.7 billion worth.

Meanwhile, the company is a dividend machine. Not only has it paid more than 70 consecutive dividends, but it hasn't cut its payments once. And since 2004 Intel has raised dividends 463%.

Today the shares pay $0.225 each quarter, for an annual yield of 3.5%. But here's the kicker... those dividends are likely to continue their rapid rise. In 2012, Intel paid out just 40% of its profit as dividends.

One more reason to think Intel's kind policies toward shareholders will continue... as of the end of 2011, the company held $18 billion in cash on the books.

No wonder John Kerry, dozens of member of Congress, and George Soros all seem to love this stock.

Risks to Consider: So far, Intel hasn't become a dominant player in chips for smartphones -- a major growth market. Meanwhile, PC demand is cooling in developed markets.


(9.) Markel (NYSE: MKL)

There's a problem with Warren Buffett's Berkshire Hathaway (NYSE: BRK-B)... even Warren Buffett himself says so:

"Our future rates of gain will fall far short of those achieved in the past. Berkshire's capital base is now simply too large to allow us to earn truly outsized returns."

Most company leaders would be ousted if they admitted as much. But Warren Buffett isn't your typical executive. It stands to reason: If Buffett himself is cool to his company's prospects, why should we invest?

That's why we like "Forever" Stock #9 -- Markel -- which we call "Baby Berkshire." It invests just like Warren Buffett's Berkshire Hathaway, but there is one major difference...

This company is still small enough to make nearly any investment it wants, which can lead to big returns. Berkshire has a market capitalization worth hundreds of billions. Markel's is just $5 billion.

Just like Berkshire, Markel is a property and casualty insurance company. Its origins date all the way back to the 1920s, when founder Sam Markel began by insuring "jitney busses" -- pint-sized busses usually operated by veterans just back from WWI.

Today, the company specializes in offbeat and niche insurance markets that most other companies won't touch. The company covers items as diverse and unique as summer camps, antique motorcycles, auto races and amusement parks. These niche markets mean Markel faces limited competition, allowing the company to have pricing power over its rates without fear of losing customers.

And just like Berkshire, Markel takes in those premiums, invests them in the market, and looks to turn a profit. In addition to Treasuries, municipal bonds, and corporate bonds, the company also invests in equities.

There should be little surprise that Berkshire Hathaway shares make up one of Markel's largest holdings... as do a number of other stocks owned by Berkshire.

Buffett favorites like Coca-Cola (NYSE: KO), Costco (Nasdaq: COST), and American Express (NYSE: AXP) are all held in Markel's portfolio.

But like we said, Markel has the size to invest in smaller companies Berkshire couldn't touch. That includes AMF Bakery Systems, a leading manufacturer of high-speed bakery equipment, and Ellicott Dredges, a leader in portable dredge design and manufacturing.

Risks to Consider: Like any property and casualty insurance company, Markel could suffer losses from man-made or natural disasters and its investments could be impacted by changes in interest rates, broad economic conditions and regulation.


(10.) CPFL Energia (NYSE: CPL)

I looked all the way to Brazil for "Forever" Stock #10, but don't worry... it trades on the New York Stock Exchange.

CPFL Energia is the largest electricity transmission and distribution company in Brazil, with approximately 7 million customers. The company's regulated areas of operation include some of the most developed and wealthiest parts of the country.

In a developed market like the U.S. or Western Europe, annual growth in electricity demand is modest. And thanks to the global economic downturn of 2007-09, some developed markets consume less power today than they did back in 2006-07. But that's not the case in Brazil -- in the past decade energy demand has jumped 33%.

CPFL's profitability is also supported by its monopolistic position. Roughly three-quarters of its total power sales were to captive customers who do not have the option of switching to another electric distributor. These customers pay a regulated rate that offers CPFL a reliable return on its investments. The company has also been successful holding on to its customers who are able to actively choose their own electrical provider.

In addition to distribution, CPFL owns power plants or stakes in power plants and sells electricity at unregulated rates. While these segments carry higher business risks than CPFL's core distribution segment, there's also plenty of growth potential.

I also like the fact that CPFL generates the majority of its electricity from clean, renewable energy sources. The firm operates more than a half dozen hydroelectric power plants throughout Brazil, plus several wind and biomass plants.

While CPFL is the largest electricity distributor in Brazil, it still has just a 13% share of the total market. That gives the company plenty of opportunity to grow by acquiring other firms in its core distribution market or in its smaller generation and commercialization segments.

Like many utilities, CPFL pays a hefty dividend yield. The company makes semi-annual payments, with a policy of distributing at least 50% of net income. The two most recent dividends add to $1.53 per share, giving the stock a recent yield above 7.5%.

This is the sort of stable and growing business that we want to hold forever. The company operates in a regulated business that offers stable returns on investment. In addition, it's seeing growth opportunities, mainly through acquisitions, along with a nice yield.

Risks to Consider: The company is exposed to to risks from both foreign currency exchange rates and interest rates. We also are concerned about the effects of forthcoming rate redeterminations on the company's ability to maintain its distribution and expect this headwind to crop up during the next round of tariff resets that begins in 2015.


We sincerely hope you've enjoyed today's report, The 10 Best Stocks to Hold Forever. On behalf of our entire staff here at StreetAuthority.com, we'd like to wish you the best of success in your investing in the months ahead.

Note: The securities mentioned in this report are consistent with the editor's investment strategy and philosophy. These investment ideas, however, should just be a starting point for your own research. For the editor's timeliest investment suggestions, please consult the newsletter's current portfolio additions and/or "Buy First" list.

Disclosure:  At the time of this writing, Editor Elliott Gue owned shares of PM. StreetAuthority, parent company of Dividend Opportunities, owned shares of DEM, BIP, GOOG, PM, UTG, MA, AMJ, INTC, and CPL as part of the company's various "real money" and investment portfolios. In accordance with company policies, StreetAuthority always provides readers with at least 48 hours advance notice before buying or selling any securities in any "real money" model portfolio. Members of our staff are restricted from buying or selling any securities for two weeks after being featured in our advisories or on our website, as monitored by our compliance officer.