7 Best Long-Term Stocks to Buy Now
Historically, stocks provide superior returns compared to more conservative investments such as bonds or bank savings accounts. But to get the most out of your equity investments you have to give them time to grow. All stocks experience short-term price fluctuations.
Downturns can last weeks, months, or, in the case of a sustained bear market, even a few years. Over decades, however, the stock market has demonstrated consistent growth, and individual equity investments – if they are chosen wisely with an eye towards quality and financial strength – can contribute significantly to wealth creation over time.
Why Hold Stocks for the Long Run?
When you buy a stock you are buying a piece of a company; you now own a slice of its equity. That’s why stocks are often referred to as equities. Stockholders enjoy all the incredible benefits of ownership. If the company you’ve bought does well, that is if its market share, sales and profits grow, the value of your shares will go up. Consequently, stock ownership is one of the best ways to participate in the expansion of the world economy and benefit from all the growth, expansion and innovation that accompanies that expansion.
As an additional benefit, many stocks pay regular dividends. Dividends are a share of the earnings that a company chooses to distribute back to shareholders, usually in cash. Dividends can be saved in bank or money market accounts, used to offset current household or business expenses or they can be reinvested back into the financial markets. However an investor chooses to use their income, dividends serve to enhance their total return over the long run.
What Are the Best Long-Term Stocks to Buy Right Now?
When buying long-term stocks, it’s best to pick well-established, financially sound companies with long track records of success. Choose companies that have demonstrated their ability to weather all kinds of market conditions, economies and interest rate environments.
It’s also important to diversify your holdings. Don’t invest in just one or two industrial sectors. Remember, there’s a risk to stock market investing. Spread out that risk by buying stocks that cover several different sectors.
No one can predict the short-term performance of individual stocks. Even the best-performing companies go up and down with the market and for company-specific reasons. But if you’re going to invest for the long run, the following seven stocks look hard to beat:
Semiconductor Manufacturing Co. Ltd. (TSM)
Computer chips, or semiconductors, are at the heart of the world’s ongoing technology revolution. Advanced technologies like artificial intelligence, 5G communications, electric vehicles and more all rely on semiconductors and related components to work. Developed nations around the globe are making huge investments in computer chip innovation and manufacturing facilities. To call semiconductors a high-growth industry is a massive understatement.
TSM is a leading chipmaker involved in the manufacturing of semiconductors and ancillary products which are essential for virtually all of today’s electronic and computer devices. This critical company operates on the cutting edge of the high-tech industry.
Wall Street is looking for $85.2 billion in revenue from this $895 billion company in fiscal 2024. In 2025, analysts are expecting that figure to grow by more than 21% to $103.8 billion.
Due to the seemingly never-ending global demand for advanced computing and high-tech devices, TSM offers investors incredible growth potential over the long haul.
Mobil Corp. (XOM)
With a market cap of $513 billion, XOM is one of the world’s largest publicly traded diversified energy companies. True to its roots, it specializes in hydrocarbon energy sources like oil, refined oil products and natural gas, but due to a sustained and significant effort, it’s quickly becoming a dominant force in the renewable energy space as well.
As might be expected, XOM is a leader in petroleum byproducts. For instance, Exxon is heavily involved in producing and distributing lubricants, many chemicals such as ammonia and sulfur, gases such as butane and propane, and other useful products.
As an added benefit to long-term investors, XOM currently pays an annualized dividend of $3.80 per share, which equates to a 3.3% yield.
(KEY)
KEY enjoys a market cap of nearly $13 billion, which is a good size for a regional bank.
KEY is a federally chartered banking institution that makes its headquarters in Cleveland. It will be better known to most investors by the name of its main subsidiary, KeyBank. KEY operates in both the consumer banking and the commercial banking segments.
The consumer banking division offers individuals and organizations modern banking services such as checking accounts, savings vehicles, mortgages and credit cards. The commercial banking division serves institutional customers by offering commercial lending, Treasury and cash management services, equipment and business financing, and investment banking.
Despite being founded in 1849, no one can say the company is old fashioned. It was an early adopter of online and digital banking services and remains at the forefront of financial technology.
The stock also has a healthy dividend yield of 6.1%, the highest of any stock on this list.
Wholesale Corp. (COST)
COST is a $380 billion retail powerhouse that has mastered the very challenging members-only wholesale club business model.
COST is based in the U.S. but must be considered a multinational company. It operates 876 wholesale superstores all over North America, Europe, Asia and Australia. The company offers members a large selection of groceries, apparel, small and large appliances, gardening supplies and just about anything else a consumer might need.
The Wall Street consensus earnings estimates for COST during fiscal 2024 are $16.31 in earnings per share (EPS) on $255 billion in revenue. A steady grower, analysts are looking for the numbers to march even higher in 2025, with consensus estimates calling for EPS of $17.67, up 8.3%, on $273.1 billion in revenue, up more than 7% from 2024.
COST is known for its unique and highly profitable business model and for having extremely loyal customers. All this adds up to an excellent potential for long-term share price appreciation today and well into the future.
Group Inc. (UNH)
The $445 billion company, UnitedHealth is an established leader in health benefits and health insurance as well as in direct health care services and technology. Its leadership status in the fast-growing health care sector and its diversified lines of business make it an excellent choice for investors looking for a long-term stock.
Offering a variety of benefit and insurance plans through public and private sector employers as well as directly to the consumer, UNH is one of the largest health insurers in the U.S. An aging population will keep demand for health care services high for the foreseeable future.
Insurance, however, is only part of what UNH does. The company also offers care delivery, care management, wellness programs and health-related financial services. On the technology side, it provides software and health care-related information technology services. It also offers consulting arrangements and outsourcing services to hospitals, home delivery of pharmacy products, and many other valuable services.
UNH also has something for income investors to like, offering a dividend yield of 1.7%
Inc. (DOW)
Dow is a $37 billion materials science company headquartered in Midland, Michigan.
The company is organized into three segments: performance materials, industrial and infrastructure, and packaging and plastics. The performance materials segment manufactures and distributes a wide variety of paints, inks and coatings for industrial and individual consumers. The industrial and infrastructure segment is focused on chemicals and polyurethanes that are used in the residential and commercial construction industries. Lastly, the packaging and plastics segment makes gas tanks and other containers for oil and gas products such as kerosene and diesel fuel.
The company generated just over $44 billion in revenue in 2023. Wall Street expects Dow to grow revenue modestly, reaching $46.8 billion by fiscal 2025. The stock also pays a high dividend, yielding 5.3% currently.
Edison Inc. (ED)
No list of long-term stocks would be complete without a regulated public utility on it, and ED is an excellent choice for investors who take the long view.
ED is a gas and electric utility serving businesses and residential customers in New York City, Westchester County, New York, and parts of New Jersey. ED was founded back in 1823 and, with 200 years under its belt, can be considered one of the original blue-chip stocks.
ED services more than 3.7 million customers in some of the most affluent cities and neighborhoods in the country. Steady economic growth means the demand for electricity in these areas will grow along with the economy. This, along with an enticing, sustainable 3.7% dividend, makes ED an excellent long-term stock.
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