If the best offense is having a great defense, then the following companies are at the top of the game. While sports might frown upon chemically enhanced athletes, chemically enhanced portfolios are a different story. Some of the best stocks you can ever own long-term with little risk are the ones that produce products you see and use everyday no matter the economic conditions or where you live.
This one’s omnipresent
Water Displacement 40th formula was the creation of Rocket Chemical in 1953. A company, whose product was originally used to protect the outer skin of missiles from rust and corrosion and introduced as an OTC stock in 1973, WD-40 Company (NASDAQ:WDFC) has become one of the best examples of the value of brand name. Twenty years ago, WD-40 was found to be in four out of five American households with sales of 1 million cans a week. WD-40’s refusal to patent their classic formula has only shown that also realize the value of their brand.
The stock is up over 115% the past 10 years, not including its 2.20% dividend. Quarterly profit margins are increasing with the average of the past five years being 10.26%. Second-quarter 2013 earnings showed that net sales and net income increased 6% and 23%, respectively, year-to-date.
The outlook for WD-40 Company (NASDAQ:WDFC) goes well beyond its core product. The growth in the company lies in its other household cleaning brands, stain removers, deodorizers, and its expansion across the world. While there was a 41% decline in operating income in the American segment last quarter, Europe and Asia-Pacific segments increased 26% and 38%, respectively. WD-40 continues to improve the product by improving the way it is dispersed through different cans, nozzles, pens, and triggers.
The true value in the WD-40 Company (NASDAQ:WDFC) brand is that most people don’t know how much a can of WD-40 should cost. While a can lies around in nearly 90% of households in America, it is seldom used, seldom bought more than once a year, and this gives the company huge pricing leverage to increase the price over time. This also explains the decline in income by the American segment. Nearly all Americans own WD-40 Company (NASDAQ:WDFC).
Another one not to miss
As a global manufacturer of consumer and professional products like Pine-Sol wood cleaner, Glad bags, Kingsford charcoal, Hidden Valley and KC Masterpiece dressing, and Brita water filters, The Clorox Company (NYSE:CLX) is much more than bleach. This diverse portfolio of unrelated products owned by Clorox all hold the number one or two market share positions in their categories.
Clorox is up 88% the last decade, not including its 3% and annually rising dividend, while its average quarterly margin in the last five years is also 10.26%. Its strength as a stock, though, is the ability to not crumble during rough market conditions. During the recent Great Recession, the stock fell to just two-thirds of its peak share price before the recession began. What this means is that people will always need bleach – or at least one of The Clorox Company (NYSE:CLX)’s products – no matter the economic environment.