If I Could Only Buy and Hold a Single Stock, This Would Be It.

If I could only buy one stock right now and hold it long term, there are several different ways I could go.

In full disclosure, my usual go-to answer is Berkshire Hathaway, and for good reason. The conglomerate is designed to perform well no matter what the economy is doing, and its diverse collection of stocks and subsidiaries essentially makes it a broad investment portfolio in a single stock.

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However, given that Berkshire is trading at an all-time high right now and the stock market has caused some major declines in 2025, my answer would be a little different if I were buying one stock to hold for the long term today.

If I could only buy one stock (May 2025 edition)

If I didn't own any stocks at all right now and were allowed to buy only one to hold for the long term, a great case could be made for Realty Income (NYSE: O). This real estate investment trust, or REIT, has a lot of the qualities I look for in a long-term investment, and has a long-established track record of excellent performance.

If you aren't familiar, Realty Income owns about 15,600 properties in the United States and Europe and is one of the largest publicly traded REITs. About three-fourths of its rental income is from retail tenants, and there are also significant allocations of industrial, gaming, and even agricultural real estate in the portfolio.

Although the word "retail" might frighten investors, especially with a possible recession soon, Realty Income hand-picks tenants that are of high quality and operate in one or more of these types of retail:

• Nondiscretionary retailers that sell things people need. For example, Walmart and CVS are among the top tenants.
• Low-price retailers that offer bargains even e-commerce giants can't match. Dollar General and BJ's Wholesale are major Realty Income tenants.
• Service-based retailers that don't sell physical products. FedEx is a great example.

All this means Realty Income's portfolio is rather recession-resistant and also isn't particularly vulnerable to e-commerce disruptions. Plus, tenants sign long-term net leases that require them to cover variable costs (taxes, insurance, and maintenance), and have annual rent increases, or escalators, built in.

Lots of growth potential

It's also worth noting that although Realty Income is a massive REIT, it still has tons of room to keep growing. It has recently started expanding into new property types, such as gaming and data center properties, and it is still in the very early stages of its European expansion.

In all, Realty Income sees a $5.4 trillion addressable market size in the United States alone, so there are still ample opportunities to find attractive investments.

In Europe, things could get even more interesting. Not only does Realty Income estimate there is $8.5 trillion worth of real estate in the continent, but less than 0.1% of it is currently owned by publicly traded REITs today.

A tremendous track record

Realty Income is an excellent income stock (as its name suggests), with monthly dividend payments that give investors a 5.6% dividend yield at the current share price, which is about 25% below its all-time high.

Not only is the income strong and reliable, but it should grow nicely over time. Realty Income has increased its dividend in 110 consecutive quarters, and there's no reason to believe this streak will end anytime soon.

Thanks to a history of extremely smart capital allocation, Realty Income has been a great total return stock. From its 1994 NYSE listing through the end of 2024, Realty Income produced a 13.4% annualized total return for investors, handily beating the S&P 500 (SNPINDEX: ^GSPC). For context, this means that a $10,000 investment at the IPO would be worth about $435,000 today.

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Matt Frankel has positions in Berkshire Hathaway, FedEx, and Realty Income. The Motley Fool has positions in and recommends Berkshire Hathaway, FedEx, Realty Income, and Walmart. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy.