Finding long-term stocks to buy now and hold forever certainly sounds like a good idea. Of course, many investors often hear that “nobody can time the market”, and I think that sentiment is truer than ever. Time in the market beats the beat of the market, and those with long-term investment ambitions often do best by doing absolutely nothing but trying to time the swings of the market.
Of course, that’s easier said than done. We all like to try to time the low or sell the high.
However, those looking to put fresh capital to work right now may find themselves in a tough spot. Indeed, valuations are still elevated, despite recent stock price declines among many big winners in recent years.
The question many investors are asking right now is where to focus their energy. Is it better to buy battered growth stocks, in the hope that the market doesn’t end up in a long-term bear market for technology? Or are safe, defensive stocks a better buy, despite the fact that many of these companies have actually seen their valuations rise lately?
It is a difficult time. However, here is a mix of stocks that I think are worth a long-term buy and hold strategy. Each of these companies is reasonably valued and has a significant long-term advantage over its peers.
Main long-term stocks: Enbridge (ENB)
Enbridge is one of North America’s largest midstream organizations that operates an extensive pipeline network that transports gas and oil, keeping the United States and Canada warm and powered. This Calgary-based multinational organization pays out a whopping dividend yield of around 6.3%.
Of course, yield isn’t everything, but it’s a solid foundation to build on for investors who believe that yield will hold steady. Even modest capital appreciation is likely to result in double-digit annual returns. In these types of markets, aiming for modest returns is a good thing.
Today, many investors may view these higher oil prices as unsustainable. However, Enbridge’s model is less tied to the price of oil compared to its producer counterparts. As a pipeline operator, Enbridge receives relatively regular payments that are reliable and increase with volume growth.
Those looking for a long-term, defensive buying opportunity with the potential to deliver double-digit returns can consider Enbridge now.
At the other end of the spectrum, we have Alphabet.
A leading growth stock for decades, Alphabet’s core business, Google, is arguably one of the best companies from a long-term growth perspective, as well as a benefit perspective. sustainable competition.
Alphabet has virtually cornered the market for enterprise ad spend in the search space. As a result, this company simply prints money every quarter, in increasing amounts.
This company has nearly $140 billion in cash and cash equivalents on its balance sheet, with only $14 billion in debt. As Alphabet continues to grow its revenue and bottom line, this high-margin business is likely to add even more cash to its treasury, while offering more stock buybacks for investors.
Although Alphabet does not pay dividends, this company invests heavily in its other growth businesses. YouTube is starting to significantly affect the company’s bottom line, and the company’s cloud business is another key growth area that many investors are watching.
Over the long term, Alphabet’s core businesses remain world-class growth opportunities that investors can jump into now.
Top long-term stocks: Berkshire Hathaway (BRK.A, BRK.B)
Possibly my favorite company of all time (mainly due to its CEO), Berkshire Hathway is a conglomerate that is nothing short of awesome. Like many others, I can’t wait to read Warren Buffett’s annual letter, which was (unfortunately) the shortest in a very long time.
However, it is Berkshire’s fundamentals and core business that most long-term investors stick with. This company owns and operates a number of entities while also owning shares of a number of other world-class companies.
Among Berkshire’s biggest holdings is Apple, a company that I think is a great long-term hold. Those who buy Berkshire essentially get 40% of their exposure in the form of Apple, which I like in this environment.
Overall, Berkshire’s core portfolio businesses comprise a stable of strong, long-term, defensive growth companies. Those looking for diversification and modest long-term capital appreciation can’t go wrong with owning this gem.
Back to the tech space, Microsoft remains one of my top picks for those with a long-term growth orientation.
This company was the third of its kind to reach the $1 trillion market capitalization level in 2019. Since then, MSFT stock has more than doubled and is now trading at a $2.25 trillion valuation.
There are several reasons for this.
Microsoft is one of the leaders in the growth of cloud and infrastructure businesses. Today, this business provides much of the growth that Microsoft enjoys. With a strong earnings base driven by the company’s Windows and software businesses, Microsoft is definitely a company that can be classified in the defensive growth stock category.
Interestingly, Microsoft is one of the few mega-cap tech names that pays a dividend and has been doing so for a very long time. Although the return is low, those who bought ten years ago would now enjoy an annual return of almost 10%. As a result, Microsoft is a top-tier stock that I think anyone can buy and hold for the very long term, despite its incredible rise of late.
Best Long-Term Stocks: Home Depot (HD)
Most homeowners have been forced to deal with these nagging issues around the home during the pandemic. While we were all huddled together at home, people around the world were reaching out to their local Home Depot for supplies, making the HD tally of an incredible run since the pandemic began.
In the home and garden retail department, Home Depot is in a class of its own. The giant store footprint, product selection and brand strength of this company is unmatched. In fact, many think of Home Depot the same way they think of Amazon, in terms of moats around that company’s operations.
The Home Depot stock price has taken a hit lately as valuation multiples have fallen due to macroeconomic headwinds. However, those looking for long-term growth stories should appreciate this company’s positioning.
Forecasts indicate that the home improvement market will reach $1 trillion in a few years, with Home Depot to capture as much share as possible. Until people stop fixing leaky sinks or planting gardens, this is a business worth considering.
A 2.4% dividend yield is the icing on the cake which I think further provides a floor under this stock, making the HD stock a more defensive option to hold for the long term.
Let’s stay with the home improvement space for a minute. Sherwin-Williams is an absolute giant when it comes to the paint market.
This company sells more than one in four cans of paint in North America. This paints and coatings manufacturer’s products are sold under multiple brand names through its network of branded stores and retail outlets.
Whether it’s a contractor engaged in commercial projects, a homeowner remodeling, or someone looking to put an annual coating on a deck, Sherwin Williams is a great choice.
This company’s margins are impressive and the company has been printing free cash flow for some time. As a result, Sherwin Williams hasn’t been afraid to share the love with shareholders. This company’s modest but growing dividend is another reason why I view this stock as a long-term buy-and-hold opportunity.
In fact, Sherwin Williams has posted 43 consecutive years of dividend increases, making its 0.8% yield seem out of whack. However, considering that this stock has risen more than 85,000% over its lifetime, investors can see why this performance has remained low.
Abbott Laboratories (ABT)
Abbott is a healthcare company that many view as defensive.
We all need healthcare, and until the existing healthcare model is radically changed, Abbott’s business model will likely remain strong.
This company offers a range of medical devices, generic pharmaceuticals and consumer products in the market. Over the past decade, this healthcare conglomerate has reorganized, having spun off a majority stake in its pharmaceuticals business as AbbVie in 2013.
The company’s 2016 acquisitions of Alere for $5.8 billion and St. Jude Medical for $25 billion have positioned the company well to focus on medical equipment for diagnostics, cardiovascular applications and drugs against diabetes.
Like other companies on this list, Abbott pays a small but significant dividend that can help long-term investors in terms of total return. Over the long term, I think Abbott offers attractive advantages in this hard-to-time market.
As of the date of publication, Chris MacDonald had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.
Chris MacDonald’s love of investing has led him to pursue an MBA in finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative long-term investment outlook.