For long-term investors, certain characteristics can make a stock virtually irresistible. Key attributes include a compelling portfolio of indispensable products, dominant market share, consistently strong cash flow and clear avenues for future growth.

Indeed, such virtues are common in what StreetAuthority refers to as “Forever Stocks.” The term applies to shares of firms that are so financially sound and perform so reliably over the long haul, that investors can feel reasonably safe owning shares for decades.

I see such promise in Amphenol Corp. (NYSE: APH), a top producer of electronic and fiber optic connectors, cable and interconnect systems. Amphenol displays nearly all of the strengths that long-term investors covet. And with a couple relatively small tweaks, this company could attain the status of Forever Stock.

In terms of financial performance, the firm could hardly be more reliable. As the following table shows, revenue, earnings and free cash flow all grew significantly in every full year but one since 2005. Sales, for example, have been compounding by about 13% annually. Any declines were limited to the Great Recession, and in all cases strong growth resumed within a year. Industry-leading profit margins were a consistent theme throughout the period.

A key reason for Amphenol’s prosperity: the firm controls 10% of the $50-billion global market for connectors that conduct electrical and fiber optic signals or link the equipment that emits such signals.

Amphenol’s products have applications in numerous end markets including automotive, mobile devices, wireless infrastructure, factory automation, medicine and the military. Moreover, they’re crucial yet basic components that carry a low risk of becoming obsolete any time soon.

While a 10% market share may not sound like a lot, it means that Amphenol is one of the largest players in the highly-fragmented connectors industry. Amphenol’s slice of the pie makes it the world’s second-largest market participant, giving the firm premier exposure to an industry that’s been growing at twice the pace of the overall economy.

Amphenol has long been adept at delivering growth through acquisitions, and used this strategy to double market share since 2005. According to Morningstar analysts, acquisitions have typically added about 7% annually to top-line growth with no goodwill write-downs during the past decade, which is a clear signal of the company’s overall success.

Lately, management has been zeroing in on the robust automotive sector, recently completing a series of acquisitions that helped boost auto-related sales to 15% of Amphenol’s total revenue base (about $5 billion). 

In late 2013, the firm bought the Advanced Sensors Business of General Electric Co. (NYSE: GE) for $318 million. Now operating as Amphenol Advanced Sensors, this business helped transform Amphenol into a leading provider of high-tech sensors and sensor-based systems for the auto market. The acquisition also strengthened Amphenol’s grip on the broader transportation sector, the heavy equipment industry and the healthcare sector.

Around the same time, the firm purchased Tecvox LLC, which makes interconnects for automobile infotainment systems. Although relatively small at $45 million, the deal is already paying substantial dividends by bolstering Amphenol’s presence in the high-growth automotive electronics market.

In its largest deal in recent memory, the firm completed a September 2014 $450-million buyout of the Casco Automotive Group. Inc., a key supplier of data connectivity, USB charging ports, video equipment and certain types of sensors to the American, European and Asian auto markets. Casco had annual sales of about $220 million at the time of the acquisition.

As a result, the auto market is now on par with the mobile devices, information technology/data communications and industrial sectors as a revenue source. 

Amphenol also obtains significant revenue in the broadband communications, commercial aerospace, mobile networks and military markets.

Because of its entrepreneurial culture, Amphenol also stresses R&D. For the auto market, it continues to develop connectors and interconnects for components such as exhaust systems; lighting; engine management systems; and hybrid and electric drives. Other specialized innovations include high-speed Ethernet cable, extra-durable high-performance electrical connectors, high-density fiber optic panels and environmental sensors.

By offering diverse and unique products, Amphenol staves off commoditization, encourages customer loyalty and gains pricing power. Along with low-cost manufacturing processes, this should facilitate enviable growth and profit margins in the coming years.

Risks To Consider: Through its end markets, Amphenol is heavily exposed to the consumer. Any meaningful decline in consumer spending could affect the firm’s performance. Also, the costs of key product inputs — thermoplastics — are expected to gradually rise during the next few years.

Action To Take –> Keep a close eye on Amphenol, which could be a Forever Stock in the making. Currently, the main thing holding the stock back is the dividend yield. At barely 1%, this could easily be more generous considering Amphenol’s healthy cash flows and low payout ratio (around 20%). However, the pace of dividend raises has accelerated greatly in the past couple years and could soon generate yields more befitting of a Forever Stock.

While Amphenol is in solid overall financial shape, debt levels are somewhat higher than is appropriate for a Forever Stock. Investors may want monitor this before committing any capital.

With earnings expected to rise by as much as 15% annually, Amphenol certainly offers attractive capital gain possibilities. Projected growth implies roughly 90% upside for its stock over the next five years, which is substantially more than what I’d expect from the S&P 500 during that time.

Stocks like APH are similar to a special group of securities we call “Forever Stocks.” These world-dominating companies control deep economic moats allowing them to fend off competitors. And they pay investors fat dividends while buying back massive amounts of stocks, which boosts the value of their remaining shares. These stocks are strong enough to buy, forget about and hold forever. To learn more about them — including some names and ticker symbols — click here.