Buy These 3 "Boring" Stocks From Peter Lynch

Mutual-fund manager Peter Lynch is one of the most successful mutual-fund managers of all time. His average annual return of 29% from 1977 to 1990 would have turned a $10,000 investment into nearly $150,000.

And in his book "One Up on Wall Street," he described the best possible stock: First, its name sounds dull. Second, it does something dull.

Lynch's insight was that when it comes to investing, "Boring is beautiful." That's because boring companies tend to be undervalued, even as they grow earnings solidly each year.

Lynch found some spectacularly performing, "dull" stocks from his time in the business. He bought payroll manager Automatic Data Processing (ADP), food-products company Bob Evans Farms (now a private company), concrete maker Consolidated Rock, and even a company that ran a network of funeral homes.

He told of his decision to buy an auto-repair service, explaining…

"Blurting out that you own Pep Boys won’t get you much of an audience at a cocktail party, but whisper “GeneSplice International” and everybody listens. Meanwhile, GeneSplice International is going nowhere but down, while [Pep Boys] just keeps going higher."

Because when it comes to investing, Lynch said, boring is often better.

So here are three "boring" stocks that could easily multiply your money in the years ahead.

"Boring" Stock No. 1: American Waterworks Inc. (AWK)

Whether or not we're in a recession, everyone needs to flush toilets… and that's where American Waterworks (AWK) comes in.

Through its subsidiaries, AWK provides water and wastewater services to approximately 1,700 communities in 14 states serving approximately 3.5 million active customers.

Since 2009, AWK has returned 645%, including dividends, compared to a 480% return for the S&P 500. It's also raised its dividend each year in the same time frame, offering further proof that "boring" companies can outperform.

"Boring" Stock No. 2: Sherwin-Williams Co. (SHW)

Sherwin-Williams makes and sells paint. It oversees the development, manufacture, distribution, and sale of paints, coating, and related products to professional, industrial, commercial, and retail customers.

You could say it's as interesting as watching paint dry… but long-term investors surely aren't complaining.

Since the 1980s, Sherwin-Williams shares have returned a staggering 128,000% for investors. Shares are up 18% in 2024 so far, including a 15.5% dividend increase.

"Boring" Stock No. 3: Iron Mountain (IRM)

Iron Mountain Incorporated IRM is a global leader in information management services. Founded in 1951 and trusted by more than 240,000 customers worldwide, it offers a range of offerings including digital transformation, data centers, secure records storage, information management, asset lifecycle management.

So clearly, it’s not too glamorous a business. But Peter Lynch would approve—IRM shares are up over 1,000% since 2000, and the company just increased its dividend by 10.5%. Revenue growth was 13% last quarter, further evidence that this "boring" company continues to deliver for investors.

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