As an investor, it’s hard to get the balance right between constantly checking on the performance of a stock, versus investing for the long term. To prevent costly over-trading, buying a dividend share or a growth stock and simply leaving it can often be the most profitable action.
With that in mind, here are two income stocks I’d be comfortable buying now and forgetting about.
A bank under the radar
The first company on my list is Investec (LSE:INVP). The share price is up 2% over the past year, with a current dividend yield of 6.33%.
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In order to give me the peace of mind to buy and hold this for many years ahead, I want to tick two boxes. The first one relates to how sustainable the dividends will be.
The past doesn’t always correlate to the future, but it does give me a good feel. Therefore, when I note that the bank has been paying a dividend for the past two decades, it does make me confident that the next two decades could be similar.
The other factor is if the firm can still be in business for the long term. Again, I think that Investec ticks this box. The bank has been operating since the 1970s in South Africa. Since then, it has expanded to the UK, the US, and many other markets worldwide.
Revenue and profitability have been strong since the pandemic, thanks to rising interest rates. Granted, I don’t see the firm becoming a top tier bank to rival the likes of HSBC or Barclays. The risk is that any growth potential will be capped due to the strong competition from bigger rivals. But this doesn’t take anything away from the ability for it to still be a very profitable enterprise.
Building for the future
Another idea is Travis Perkins (LSE:TPK). The UK builders’ merchant and DIY store can technically trace its history back to 1797. It has existed in the current business form since 1988.
The dividend yield of 5.12% might not be the highest in the FTSE 250, but I certainly feel I could buy this stock for income and forget about it. Travis Perkins did briefly halt dividend payments in the initial phase of the pandemic, but resumed them in 2021.
What I like about the firm is that it should have consistent demand from customers. Regardless of the state of the economy, the products supplied are necessities for many. Therefore, I’m confident that if I bought this stock now, the company would still be in business in a decade or more.
The share price is down 22% over the past year. Part of this was due to the profit falling in H1 2023 results. This was down to weaker demand in new build housing. It’s true that the firm is impacted by the wobble in the property sector, and this is a risk going forward.
I’m thinking about buying both dividend stocks now and putting them in my long-term portfolio.
