2 passive income stocks for the next 10 years and beyond

When I buy stocks, I look for investments that I can own for the long term. That means finding a business that can grow your net income over the next decade or so.

Thinking in terms of the next 10 years means looking past the possibility of a recession in 2023. It includes thinking about what the demand for products will look like over time and which companies will benefit.

Forterra

With a current dividend yield of 5%, Forterra (LSE:FORT) looks like an attractive stock for dividend investors. And I think the brick and mortar company can do very well over the next decade.

British brick is an industry where demand exceeds supply. And I expect this to continue for the next 10 years.

Current building projects use about 2.6 billion bricks, but the local production capacity is only about 2.1 billion. That leaves a significant shortfall, giving brick-and-mortar businesses like Forterra scope for profitable growth.

The company has sought to take advantage of this by upgrading its factories to increase production capacity. I expect this to pay off with increased earnings over the next decade.

Of course, other brick companies are doing the same, so there is a significant risk of competition. But there are several reasons why I think this risk is limited.

Initially, Forterra bricks were used in around 25% of homes in the UK. This makes them a natural choice for extensions, which I expect to become more popular as the amount of space available decreases.

Second, despite the planned investment, local manufacturing supply still falls short of demand. That means there is scope for all UK brick companies to produce good results.

At a price-to-earnings ratio (P/E) below 10, Forterra stock looks cheap to me. I think it can be a psasive source of income for the next 10 years.

Kraft Heinz

I think so Kraft Heinz (NASDAQ:KHC) flies under the radar of most passive income investors because dividends have been flat since 2019. But I expect an increase in shareholder returns in the near future.

Savings is a very different kind of proposition than Forterra. If the demand for bricks is related to interest rates and house prices, the demand for food is more stable and stable.

As a result, I don’t expect corporate earnings to get a significant boost from the economy. But I think it has a good capacity for revenue growth.

The main risk with Kraft Heinz is the amount of debt on the balance sheet. This is the main reason the dividend is static and something investors should pay attention to as interest rates rise.

This is something that the company has been doing since 2019. During that time, the company’s long-term debt has been reduced by around 32%.

With the balance sheet in better shape, I expect Kraft Heinz to spend less on interest payments. As a result, I expect shareholder returns to increase.

I don’t think the stock is overpriced right now. I am a good choice for investors looking for passive income in the long term.