Find Your Balance: 3 Stocks With Incredibly Durable Cash Flow, Dividends, Value and Growth

Finding perfection in the world of individual stocks is so darn difficult. That’s why so many investors resort to index funds, exchange traded funds, and other vehicles which allow for passive equity exposure.

I’ve got nothing against such investing vehicles, and in fact, ETFs and index funds make up a sizable portion of my own portfolio.

That said, I’m also of the view that investing in top individual stocks and holding for the long-term can provide the juice building upon my base to potentially outperform the market over the long-haul. I’m not in this for one year or five years. I’m in the game for decades (God willing).

So, I’m always on the search for world-class companies with durable cash flow profiles, solid (and growing) dividends, value and a long-term growth trajectory. The following three companies I’m going to highlight in this piece have all four.

Heres’s why I think investors looking for portfolio balance may want to consider these names right now.

Coca-Cola (KO)

There’s perhaps no more boring of a business model than carbonated beverages. You produce these sugary beverages, package them, ship them out. That’s it. But really, it comes down to brand at the end of the day – consumers want to buy what they’re familiar with. And on this front, Coca-Cola (NYSE:KO | KO Price Prediction) is the clear undisputed leader.

The company remains a premier growth pick with it unmatched global brand moat and pricing power, which has sustained continuing price appreciation (and dividend growth over time). Perhaps more importantly, this business model driven by an incredible brand that’s recognized in essentially every country in the world provides robust cash flows and meaningful growth year in and year out.

It’s that consistency that investors opt for. Notably, on the growth front, Coca-Cola continues to surprise. This past quarter, the company posted remarkable revenue growth of 12% year-over-year to $11.2 billion, with 10% of this growth coming from organic sales volume. That’s right, folks aren’t stopping their Coke consumption habits. Global consumers continue to reach for that red tin can or PET bottle.

With incredible operating margins around 33% and plenty of upside given its forward P/E of just 22-times, there’s too much to like about Coca-Cola to not write way more than I already have.

Chevron (CVX)

In the world of oil and gas production, refining, delivery and retail, Chevron (NYSE:CVX) is a brand that almost as synonymous as Coca-Cola, at least in the West. The company remains a growth powerhouse in everything tied to the energy sector, with revenue growth for the behemoth coming in at a whopping 12% this past quarter. Perhaps more importantly, Chevron’s EPS of $1.52 beat estimates by more than 5%, signaling this is a company that’s able to maintain its margins despite commodity price fluctuations.

Indeed, in the energy sector, this is really the big deal I think investors should pay attention to. Chevron owns nearly every aspect of the value cycle in pulling oil out of the ground, to turning it into gasoline, and selling it to consumers at thousands of gas stations around the world. As such, Chevron’s ability to grow really amounts to its ability to scale using its brand, which it has done incredibly well.

With a solid dividend yield of more than 4% and plenty of buybacks and dividend hikes over the course of decades, those looking for capital returns won’t be disappointed. And with gross margins remaining robust (and plenty of operational leverage as well), this is a stock I think investors can sleep well owning for decades to come.

McDonald’s (MCD)

GLP-1s were supposed to kill the fast food industry, margins have come down, and consumers are continuing to complain about high prices. Just don’t tell McDonald’s (NYSE:MCD) investors.

The company’s share price has continued to move up and to the right for decades, through recessions and terrible economic drawdowns. Why? Well, McDonald’s world-class brand and its ubiquitous nature globally have resulted in incredible market share and locations spread out virtually everywhere across the globe.

The company’s recent 7% system wide sales growth figure has mostly been driven by digital dominance and menu innovation. The thing is, these catalysts are ones I view as scalable and replicable, so McDonald’s future growth potential remains untapped.

With strong franchise efficiencies seen in rent years, McDonald’s has also been able to expand its margins. As a result, cash flows have also swelled, which has led McDonald’s to continue to raise its dividend.

The only problem for investors (and it’s a good one) is that the company’s share price continues to outpace its dividend growth, meaning this stock doesn’t yield as much as the other names on this list. I’ll take it anyway.