What Are The Best Stocks To Buy For Long Term

The best long-term stocks are growing businesses that deliver steady returns. To find them, you need to understand the metrics that provide solid evidence of dependable long-term performance. Things like regularly outperforming the S&P 500, and avoiding the big drops (and gains) that high-flying stocks tend to see over the short term.

While each of these stocks adhere to these criteria now, they may not meet them in the future. That said, stocks that meet most of these criteria today tend to outperform the S&P 500 over the longer run.

In this article, we discuss 10 best long-term stocks to buy according to Warren Buffett. If you want to see more stocks in this selection, check out 5 Best Long-Term Stocks To Buy According To Warren Buffett.

On February 9, General Motors Company (NYSE:GM) and GLOBALFOUNDRIES Inc. (NASDAQ:GFS) made a joint announcement regarding a long-term agreement for the supply of chips. As per the terms of the agreement, GlobalFoundries will be producing chips for General Motors Company (NYSE:GM) at a plant in upstate New York. This exclusive agreement is expected to increase the production of chips in higher quantities, which will prevent shortages that the automaker has faced in recent years.

Like The Coca-Cola Company (NYSE:KO), American Express Company (NYSE:AXP), and Bank of America Corporation (NYSE:BAC), General Motors Company (NYSE:GM) is one of the long-term stock picks of Warren Buffett.

DaVita Inc. (NYSE:DVA) is a Colorado-based company that provides kidney dialysis services for patients suffering from chronic kidney failure. In Q4 2022, Buffett owned 36 million shares of DaVita Inc. (NYSE:DVA) worth $2.7 billion, representing 0.90% of the total 13F securities. It is one of the long-term stock picks of Buffett, featuring on the Berkshire portfolio for 11 years.

The current market situation is not ideal for short-term investors and day traders. As of October 5, the S&P 500 has tanked over 21% year to date, the tech-heavy Nasdaq is down 30% for the year, and the Dow has lost 17.35% since the beginning of 2022. The stock market is in shambles, but for long-term investors, it has started to look like an attractive entry point.

While short-term investors are unwinding their positions and triggering major sell-offs, they are in fact creating a buying opportunity for long-term investors. Some of the best long-term stocks to buy now include Johnson & Johnson (NYSE:JNJ), NVIDIA Corporation (NASDAQ:NVDA), and Microsoft Corporation (NASDAQ:MSFT).

To determine the 11 best long-term stocks to buy now, we picked out blue chip companies with track records of profitability and strong balance sheets. We picked stocks from a variety of sectors including consumer staples, healthcare, and technology. Along with each stock, we have mentioned the hedge fund sentiment, analyst ratings, and salient features that make it a good candidate for long-term investors. The hedge fund sentiment was derived from Insider Monkey's database, which tracks roughly 900 elite hedge funds.

Colgate-Palmolive Company (NYSE:CL) is one of the best long-term stocks to buy now because of its rich dividend history, defensive business model, and strong pricing power due to a solid brand image in global markets. On September 9, Colgate-Palmolive Company (NYSE:CL) declared a quarterly cash dividend of $0.47 per share. The dividend is payable on November 15, to shareholders of record on October 21. As of October 5, the stock is offering a forward dividend yield of 2.64%.

The Coca-Cola Company (NYSE:KO) has the ability to drive long-term shareholder value and is one of the best long-term stocks to buy now. The company has been awarding shareholders with dividends for roughly 6 decades. At the close of the second quarter of 2022, 60 hedge funds were long The Coca-Cola Company (NYSE:KO) and held stakes worth $28.3 billion in the company. This is compared to 64 hedge funds in the previous quarter that had stakes worth $29 billion in the company.

Some of the top blue-chip companies that should be on long-term investors' radars include The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), NVIDIA Corporation (NASDAQ:NVDA), and Microsoft Corporation (NASDAQ:MSFT).

Costco Wholesale Corporation (NASDAQ:COST) is one of the best long-term stocks to buy now because the company has a track record for profitability and financial growth. Over the past ten years, Costco Wholesale Corporation (NASDAQ:COST) has returned 20% to investors, outperforming the S&P 500's return of 12% for the same time period.

Walmart Inc. (NYSE:WMT) is one of the largest retailers in the world by revenue and is one of the best long-term stocks to buy now. Walmart Inc. (NYSE:WMT) is a cash-rich and profitable business that can meet its long-term financial goals and drive long-term shareholder value. As of July 31, Walmart Inc. (NYSE:WMT) has a debt-to-equity ratio of 0.58. The company has a trailing twelve-month operating margin of 4% and has free cash flows of $5.4 billion.

The Procter & Gamble Company (NYSE:PG) is one of the best dividend-paying long-term stocks to buy now. The company's defensive business model makes it less vulnerable to changes in economic cycles and allows it to maintain its profitability. The Procter & Gamble Company (NYSE:PG) has a trailing twelve-month operating margin of 23.3% and has free cash flows of $13.5 billion. Over the past ten years, The Procter & Gamble Company (NYSE:PG) has returned 9.68% to investors.

Merck & Co., Inc. (NYSE:MRK) is presenting an attractive entry point for long-term investors and is trading at bargain levels. As of October 5, the stock has a trailing twelve-month PE ratio of 13.47 and is offering a forward dividend yield of 3.15%. Merck & Co., Inc. (NYSE:MRK) has consistently grown its dividends for the past decade and the stock is one of the best undervalued long-term stocks to buy now.

When seeking out the best stocks to buy now, investors will need to be brave and patient in regard to timing, as well as agile as the stock market eventually transitions from bear market to bull market. Go ahead and add resolute to the character traits you'll need this year, because many market strategists say you can't get from one market to the other without going through a recession first.

Given the uncertain, sometimes roiling backdrop for stocks, where should investors look when seeking out the best stocks to buy now A popular piece of advice among Wall Street strategists now is to resist the bargain-basement appeal of the most beaten-up stocks and focus instead on high-quality shares. \"Investors should avoid volatile names and be cautious on both deep-value and unprofitable growth companies,\" says Koesterich. \"Instead, emphasize quality with a focus on earnings consistency and good profitability.\"

Now may be a good time to tilt toward value-oriented companies and small-cap stocks, both longtime underperformers that are showing signs of new life. Over the past five years, for example, the S&P 500 Value Index (opens in new tab) has returned 6.2% annualized, compared with 9.1% for the S&P 500 Growth Index (opens in new tab). Through early 2023, value has outperformed growth, with a 4.1% return compared to growth's 3.8% gain. \"We would stick with value. These cycles last a while,\" says Ryan Detrick, chief market strategist at money management firm Carson Group (opens in new tab). Sectors typically grouped in the value style include energy, financials, industrials and materials.

So, with all of this in mind, here are 12 of the best stocks to buy now. The names featured here vary by size and industry and are not meant to compose a diversified portfolio. But all, for one reason or another, are well positioned to benefit from a transition to a bull market from a bear market in 2023.

Don't ignore the tenets of diversification and shun tech or the growthier side of the market completely when adjusting your portfolio to include the best stocks to buy now. Instead, take a barbell approach, says Tony DeSpirito, a managing director and portfolio manager at BlackRock (opens in new tab). This will allow you to scoop up value-focused shares at historically attractive relative price-to-earnings ratios (P/Es) and high-growth stocks at valuations that have come down from the stratosphere and are now at normal, if not yet underpriced, levels.

Take Advanced Micro Devices (AMD (opens in new tab), $76.61), a leading semiconductor manufacturer. Analysts have mixed ratings on one of Wall Street's best semiconductor stocks in part because an economic slowdown and negative investor sentiment are near-term obstacles.

Matador Resources (MTDR (opens in new tab), $52.38) is an oil and gas exploration and production company that has risen alongside its fellow energy stocks over the last 12 months. Specifically, MTDR stock is up more than 20% year-over-year.

Even with its impressive growth on the charts, MTDR is one of best values on this list of the best stocks to buy now. Shares are currently trading at just 5.1 times forward earnings, well below Matador's five-year average of 11.2.

Investors seeking out the best stocks to buy now might consider holding for longer than one year: Keith says she sees \"significant market-share opportunity\" for Workday, and over the next three years, the stock's potential reward outweighs the risk.

Why is Merck (MRK (opens in new tab), $109.16) on this list of the best stocks to buy now The pharmaceutical giant is known for its high returns over the past decade. Analysts are upbeat toward MRK, too, as evidenced by a consensus rating of Buy. Of the 27 analysts that follow Merck tracked by S&P Global Market Intelligence, 13 say it's a Strong Buy, seven have it a Buy, six call it a Hold and one rates it at Sell.

And for investors seeking out the best defensive stocks, Huynh says MRK's growth is \"low risk,\" and that cancer drug Keytruda and HPV vaccine Gardasil are \"well established and less affected in the near term