In this article, we will discuss the 10 Best Stocks to Buy and Hold for 20 Years.
As per Ameriprise Financials, the initial months of 2025 were tough for investors. This is because leading US stock indexes ended the first quarter meaningfully lower, countering the investor projections that stocks will continue to move northwards after the 2 strong years of returns. Notably, the tariff uncertainty has impacted the markets this year, while recession odds are increasing, and global trade frictions continue to increase. Since major market areas have corrected from the recent highs, and the outlook has become guarded, the investment firm believes that maintaining a balanced perspective of current conditions remains important during periods of market stress.
What Lies Ahead in Q2 2025?
Ameriprise Financial opines that Q2 2025 is expected to bring as much uncertainty and volatility for investors as Q1 2025. That being said, the investment firm believes that the bullish case for stocks is expected to prevail long term, considering the current firm US economic and profit conditions. However, the threat of Trump’s tariff policies and the possible retaliatory tariffs can change the broader market dynamics.
Nevertheless, the investors should not deviate from the well-diversified portfolio. As per Ameriprise Financial, the investors are required to focus on holding high-quality assets throughout their portfolio, make sure that their allocations are in line with their risk tolerance, and that they take a longer-term view of the current market stress, which, historically, can result in opportunities to dollar-cost average in the high-quality assets.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
What Could Support Equities?
As per Ameriprise Financial, if a recession is avoided, considering the recent tariff dynamics, the current stock levels can provide attractive entry points for investors who plan to dollar-cost average in the volatility. Furthermore, the US economy and S&P 500 Index corporate profits are projected to grow, says the firm. While it remains difficult to project where the economy and corporate profits can move over the near-to-intermediate term as a result of current tariff policies, the US economy and corporate earnings are expected to remain positive in H1 2025, says Ameriprise Financial.
The corporate profit margins are at strong levels relative to history, which can support companies in navigating tariff worries and stabilize demand and profits, especially if these tariff impacts are temporary. On average, when the sentiment is significantly weak and there is increased uncertainty about policy, some clarity emerges. And with this, the stock performance tends to improve over the upcoming 6 to 12 months, says the investment management firm.
Amidst such trends, let us now have a look at the 10 Best Stocks to Buy and Hold for 20 Years.
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Our Methodology
To list the 10 Best Stocks to Buy and Hold for 20 Years, we sifted through several financial media reports to choose well-established and stable companies. After getting an extended list of the stocks, we shortlisted the ones that were the most popular among hedge funds, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Stocks to Buy and Hold For 20 Years
10. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 60
International Business Machines Corporation (NYSE:IBM) provides integrated solutions and services. Wamsi Mohan, an analyst at Bank of America Securities, reiterated a “Buy” rating on the company’s stock, retaining a price objective of $270.00. The analyst’s rating is backed by a combination of factors demonstrating International Business Machines Corporation (NYSE:IBM)’s resilience and growth potential in the tough macroeconomic environment. The analyst highlighted the company’s recurring revenue streams and the mission-critical nature of workloads, offering a buffer against the broader economic fluctuations. Overall, International Business Machines Corporation (NYSE:IBM)’s defensive portfolio, turnaround efforts as well as dividend yield support the analyst’s rating.
Over the next 20 years or so, the company’s growth is expected to be driven by the burgeoning AI market. International Business Machines Corporation (NYSE:IBM)’s extensive enterprise customer base offers a strong opportunity for AI monetization. Organic product innovation, together with strategic acquisitions, improves the company’s ability to provide cutting-edge AI solutions. With businesses adopting AI technologies, the company’s expertise can fuel significant growth and market share gains. Over the long term, the company’s competitive advantages, stemming from its switching costs and intangible assets, are expected to drive growth. Elsewhere, Stifel Nicolaus analyst David Grossman maintained a “Buy” rating on International Business Machines Corporation (NYSE:IBM)’s stock, setting a price objective of $290.00.
9. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 80
AT&T Inc. (NYSE:T) is engaged in providing telecommunications and technology services. The company’s competitive advantages stem from its leading market position, investments in fiber infrastructure and 5G, and brand equity. Furthermore, it can bundle fiber and wireless services, which can also provide it with a competitive edge in the long term. Matthew Griffiths, a Bank of America Securities analyst, maintained a “Buy” rating on the company’s stock, and the associated price target remained same at $28.00. The rating was backed by a combination of factors demonstrating AT&T Inc. (NYSE:T)’s healthy financial position and strategic direction.
The analyst noted the company’s consistent market strategy, which leads to predictable operational and financial outcomes. Amidst the potential disruptions from trade and tariff issues, AT&T Inc. (NYSE:T)’s business is expected to remain resilient, says the analyst. Given the importance of smartphones, home internet service, and wireless service, AT&T Inc. (NYSE:T) remains one of the top picks that can grow over the next 2-3 decades. Over the long run, mobile data usage is expected to rise. Through continuous investments in the network, the company remains well-placed to increase its revenue and FCF over the next few decades.
TCW Funds, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“AT&T Inc. (NYSE:T), based in Dallas, TX, is a nationwide provider of voice, video, and data communications services to businesses and consumers in the wired, wireless, and broadband. At initiation, the stock had a $141 billion market capitalization and met all five valuation factors with an above market dividend yield of 5.6%. From a sustainability prism, the company completed its commitment to invest $2 billion by the end of 2023 to help bridge the digital divide. AT&T is working on enabling low-income households to access to low-cost broadband services through its Access service plan as well as reaching out to more rural communities and Tribal lands where internet access remains a challenge. It is nearly 85% the way to providing one million people in need with digital resources through AT&T Connected Learning® with the goal to be reached by the end of 2025. In 2020, the company announced that it is committed to be carbon neutral by 2035 with zero carbon emission across all operations. It is deploying Smart Climate Solutions – through efforts like its Connected Climate Initiative – that will help enable its business customers to reduce their emissions as well. The company’s goal is to help collectively reduce its emissions by one billion metric tons – a gigaton – by 2035, compared to 2018 levels. The primary catalysts are new/strong management and restructuring. John Stankey was appointed CEO in July 2020 and he is committed to refocusing the company and improving its financial performance. The company combined its WarnerMedia operation with Discovery during 1Q:22 which eliminated AT&T’s exposure to the rapidly evolving media industry and refocused its core telecommunication business thus eliminating a major drag on profitability and the company’s balance sheet by reducing long-term debt from a peak $176 billion during 2020 to $142 billion at the end of June 2024 quarter. AT&T is moving aggressively to reduce cost and sell non-core assets such as its advertising platform Xander to Microsoft† which was accomplished during 2022. The company has redesigned its network to be software driven structure reducing the capital investment cycle in its national network – resulting in a network that is flexible with unrivaled speed and reliability – thus enhancing its nationwide position. By the end of 2023, it expanded its 5G network to reach more than 302 million people in nearly 24,500 cities and towns in the U.S. The company’s mid-band 5G+ network alone grew to cover more than 210 million people. AT&T is one of the largest investors in digital infrastructure in the U.S. Over the five years ending 2023, the company invested nearly $150 billion primarily in its wireless, fiber optics, and wireline networks. The extensive restructuring and refocusing of AT&T on its core business should result in improved earnings and cash flow while at the same time reducing uncertainty for shareholders.”
8. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 84
NextEra Energy, Inc. (NYSE:NEE) is engaged in generating, transmitting, distributing, and selling electric power to retail and wholesale customers. Morgan Stanley analyst David Arcaro maintained a “Buy” rating on the company’s stock, setting a price objective of $95.00. The analyst’s rating is backed by a combination of factors demonstrating NextEra Energy, Inc. (NYSE:NEE)’s strategic positioning and capabilities in the dynamic energy market. The company’s extensive expertise and infrastructure throughout renewables, gas, and nuclear energy, together with its strong development pipeline, place it at the forefront of addressing the increased power demand.
NextEra Energy, Inc. (NYSE:NEE) expects a 55% jump in power demand over the upcoming 20 years as compared to the prior two decades, reported Reuters, while citing CEO John Ketchum’s viewpoints. As per Arcaro, the company’s focus on renewable energy, which has been regarded as the most scalable and cost-effective solution, remains in line with the broader industry’s pivot towards sustainable energy sources. NextEra Energy, Inc. (NYSE:NEE)’s capability to leverage advanced technology and data analytics across operations further improves its competitive edge.
Madison Investments, an investment advisor, released its Q3 2024 investor letter. Here is what the fund said:
“The top contributors in the quarter were NextEra Energy, Inc. (NYSE:NEE), Oracle Corporation, Progressive Corporation, Equifax Inc., and United Healthcare. NextEra has continued to perform well given its strong position in the renewable energy space, increasing demand for power, its transmission capabilities, as well as a tailwind from lower interest rates.”
