As the markets breathlessly await the Facebook IPO, one might reflect on how dramatically the world has changed in the last 25 years. Can you imagine trying to explain to someone in 1986 what Facebook even is, let alone why it’s going to be on the verge of becoming a $100 billion company? Back then personal computers were still an emerging technology. Now? Four of the ten largest companies in the world by market cap are computer or internet related. The markets are constantly changing, and new sectors and industries rise as quickly as old ones fall. However, there are some companies that continue to chug along, offering similar services as they have for decades without much prospect for major changes. As such, these “dinosaur” stocks are all very large, very old, and have profited from a relatively stable business model for a long time. However, these companies, unlike the real dinosaurs, don’t appear to be going extinct any time soon.
1. Royal Dutch Shell (RDS.B)
Royal Dutch Shell traces its roots to a merger between Dutch company the Royal Dutch Petroleum Company and British company The “Shell” Transport and Trading Company (the “shell” in quotations, interestingly enough, was a legal part of the name and a reference to the business of importing of seashells that the company was founded on) in 1907. Since then, Royal Dutch Shell has risen to become a vertically integrated oil and gas exploration company that is one of the six “supermajors.” Relatively little has changed in Royal Dutch Shell’s business plan in that time. The company engages in oil and gas exploration on five continents. Now, Royal Dutch Shell offers a strong 4.58 percent dividend yield and continues making money is precisely the same way it has for over a century.
2. Procter & Gamble (PG)
Procter & Gamble is very, very old. The company was founded by William Procter, an English candle maker, and James Gamble, an Irish soapmaker, after both immigrated to America and settled in Cincinnati. The two men had married sisters and their mutual father-in-law set up a meeting and convinced them to become business partners. That date? October 31, 1837. Now, Procter & Gamble provides a wide range of consumer goods to countries around the world, with a brand portfolio that includes Gillette, Olay, Bounty, CoverGirl, Hugo Boss, and a variety of others. Procter & Gamble has expanded and diversified over the years, but it’s focused on offering the sort of every-day items that William and James worked in over 150 years ago. The stock offers a healthy dividend of 3.26 percent.
3. General Electric (GE)
In the late 1880s, Thomas Edison waged the famous “War of Currents” against George Westinghouse. Unfortunately for Edison, he backed Direct Current, DC, an inferior system that ultimately lost out to Westinghouse’s more efficient AC system. However, from the ashes of this defeat would emerge one of the largest and most successful companies in American history: General Electric. In 1892, Edison would merge the remainder of his electricity assets, which he had formed into the company Edison General Electric, with the Thomson-Houston Electric Company, which had gained access to a number of important patents by acquiring competitors. The company that emerged would become a gold standard in the industry, a multi-national conglomerate that makes everything from light bulbs to wind turbines. General Electric reached a peak in September of 2000 and has seen its shares plunge in value some 70 percent since its all-time high, getting his particularly hard by the financial crisis of 2008. However, GE announced yesterday that it was increasing its dividend to $0.17 per share, a yield of over 4 percent.
4. Johnson & Johnson (JNJ)
Robert Wood Johnson founded Johnson & Johnson with his brothers James Wood Johnson and Edward Mead Johnson after being inspired by a speech by anti-septic champion Joseph Lister in 1885. It’s strikingly ironic, then, that Listerine Mouthwash, which was named after Joseph Lister in 1879, is now one of the many brands of hygiene products that are owned and distributed by Johnson & Johnson. While the company was originally started to sell surgical dressings, it has long since expanded into one of the largest conglomerates in the world. With a brand portfolio that includes but is not limited to Tylenol, Neutrogena, Nicorette, Rogaine, Sudafed, and Visine, Johnson & Johnson has created a steady, consistent business model that has repeatedly shown profits through up and down markets over the years.
5. Pfizer Inc. (PFE)
Drug companies aren’t normally known for stability as fortunes can rise and fall rapidly with the results of clinical trials. Pfizer, however, has bucked that trend with its 150 plus years in business. Founded in 1849 by cousins Charles Pfizer and Charles Erhardt as Charles Pfizer and Company, Pfizer rapidly expanded and was a major company producing pharmaceuticals and specialty chemicals by the turn of the century. The company showed steady growth throughout the 20th century, bolstered by the use of its products in both World Wars and the production of penicillin in the 1940s, before spiking in the 1980s and 1990s with a series of popular medications including Viagra, Zoloft, and all-time best-selling drug Lipitor. Like GE, the company’s share value peaked in 2000 before retreating over the last decade, losing over 50 percent since reaching its all-time high. However, also like GE, Pfizer announced plans earlier this week to raise its dividend to $0.22 per share, an increase of 10 percent for a total yield of 4.2 percent.
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