7 Long-Term Stocks to Buy and Hold Forever
With so much still up in the air regarding macro issues like high inflation and rising interest rates, it remains key to stick with high-quality long-term stocks to buy and hold.
Top names in this category of stocks are well-positioned to ride out/thrive in today’s environment, and really take off when the bull market returns.
In the near term, these types of stocks are either benefiting from industry and company-specific tailwinds that outweigh the overarching headwinds currently affecting the overall stock market’s performance.
Over the long term, these stocks can deliver solid returns for your portfolio. Continued earnings growth stands to propel them to higher prices over time. In addition, with some exceptions, these stocks pay out steady dividends, which provides a further boost to long-term total returns.
So, what are some of the best long-term stocks to buy and hold in today’s market? Take a look at these seven. Each one currently earns an A rating in Portfolio Grader.
| DVN | Devon Energy | $61.08 |
| LLY | Eli Lilly | $367.25 |
| LNG | Cheniere Energy | $162.49 |
| OXY | Occidental Petroleum | $64.03 |
| PDD | Pinduoduo | $86.07 |
| SQM | Sociedad Quimica y Minera de Chile | $92.93 |
| XOM | ExxonMobil | $106.09 |
Devon Energy (DVN)
With crude oil and natural gas pulling back, it may seem as if the boom times are waning for the energy space. In turn, a bad time to initiate or add to a position in Devon Energy (NYSE:DVN).
However, before you take a pass on DVN stock, keep in mind that although prices have pulled back in recent weeks, forecasts still call for elevated energy prices into 2023. The U.S. Energy Information Administration’s short-term energy outlook calls for both crude oil and natural gas prices to stay above 2021 levels.
High energy prices will enable this A-rated energy stock to continue paying out a high dividend (forward yield of 9.06%). On a long timeframe, the steady returns from this dividend, coupled with possible share price appreciation (as it becomes clear fossil fuel prices aren’t returning to 2020/2021 lows) signals strong potential returns remain for DVN.
Eli Lilly (LLY)
Trading for 46.15 times estimated 2022 earnings, on a stock screener Eli Lilly (NYSE:LLY) looks a lot pricier than its big pharma peers. Yet taking a closer look at the details, one can argue that this high valuation is more-than-justified.
LLY stock can sustain (and possibly grow) its current valuation, largely because of its main drug candidate, tirzepatide. This drug, marketed as Mounjaro, has been approved for use in treating Type 2 diabetes. As I discussed previously, Lilly is also working to get Mounjaro approved as an obesity treatment as well.
If this candidate obtains this label expansion, it may result in massive revenue. Analysts at UBS believe Mounjaro could eventually generate $25 billion in peak annual sales. Add in the potential from its Alzheimer’s drug candidate, and it’s clear why A-rated LLY is one of the best long-term stocks to buy and hold.
Cheniere Energy (LNG)
As its ticker symbol suggests, Cheniere Energy (NYSEAMERICAN:LNG) is in the liquefied natural gas business. Cheniere owns/operates two major LNG terminals in Louisiana and Texas. The company also operates a natural gas pipeline and is involved in LNG and natural gas marketing.
LNG stock, which earns an A in Portfolio Grader, has like comparable plays performed well over the past year. This strong performance stands to continue, as trends remain especially favorable for this area of the energy sector.
As a Barron’s commentator argued last month, demand for LNG could pick up next year, as China eases on its Covid restrictions. Adding to the high demand from Europe (due to Russia’s retaliatory shutting off of gas flows), and with LNG capacity rising only modestly, companies like Cheniere are poised to benefit greatly. Longer-term liquified natural gas trends are also favorable for LNG stock.
Occidental Petroleum (OXY)
Occidental Petroleum (NYSE:OXY) is another energy stock I continue to consider one of the best long-term stocks to buy and hold out there.
In recent weeks, shares in the oil and gas exploration company have pulled back, due to the aforementioned slide in crude oil prices.
However, beyond the fact that the bull market for oil and gas may not be over just yet, OXY stock has two other catalysts that could help shares move to even higher prices over time. First, the company’s moves to de-lever its balance sheet as well as to repurchase shares. Both these efforts help to increase the underlying value of the stock.
Second, Occidental’s diversification into areas such as carbon removal. This in time could become a profitable segment for the company and something that also helps to move the needle. OXY stock earns an A rating in Portfolio Grader.
Pinduoduo (PDD)
Pinduoduo (NASDAQ:PDD) may not be a household name stateside, but plenty of U.S.-based investors are aware of the long-term growth opportunity with this China-based e-commerce company.
Since late November, PDD stock has really taken off. Chalk this up in large part to the company’s strong earnings report, released on Nov. 28. For the quarter ending Sep. 30, 2022, Pinduoduo reported 65% year-over-year revenue growth, and a 546% increase in net income per share compared to the prior year’s quarter.
Yet even with this big run-up in price, don’t assume PDD is going to move sideways, or worse reverse course, from here. Thriving at present despite headwinds like China’s “zero Covid” policy, as China begins to ease on pandemic restrictions, Pinduoduo growth is likely to continue coming in at an above-average pace. Trading at a reasonable 23.8 times earnings, A-rated PDD remains in the buy zone.
Sociedad Quimica y Minera de Chile (SQM)
Sociedad Quimica y Minera de Chile (NYSE:SQM) is involved in multiple areas of the basic materials sectors, but in 2022, it’s mostly been SQM’s lithium segment that has driven massive improvements in its operating performance and has been a needle-mover for shares.
Even as SQM stock has rallied to the tune of 80.3% so far in 2022, investors considering it now haven’t completely missed the boat here. That is, as the market remains skeptical that the “lithium boom” can continue, SQM remains undervalued, trading for just 6.8 times estimated 2022 earnings.
Lithium prices are likely to keep climbing, as demand for lithium (used in EV battery production) stays high. In turn, SQM is likely to keep climbing as well. Combined with the stock’s high 9.88% dividend yield, an investment in this A-rated stock could pay off in a big way over the next few years.
ExxonMobil (XOM)
Like with OXY, ExxonMobil (NYSE:XOM) is still one of the best long-term stocks to buy and hold, thanks to catalysts outside of rising oil prices. In the near term, the integrated energy company’s continued capital discipline efforts could have a positive impact on the stock.
On Dec. 8, XOM’s management laid out its strategic plan for the next five years, including plans to keep capital spending at between $20-$25 billion annually, as well as other cost-reduction moves.
With these plans, management expected 2027 earnings to come in at double 2019 levels, using much of these increased earnings for dividends and the repurchase of XOM stock.
This plan also includes new details on its clean/renewable energy efforts, including billions in capital to develop its low-carbon solutions business. The growth of this business into a profitable segment for the company also stands to be a long-term positive for A-rated XOM.
On the date of publication, Louis Navellier has positions in DVN, LNG, OXY, SQM and XOM. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
