In this article, we will look at the 11 best long-term stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best Long-Term Stocks To Buy Now.
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.
Wharton’s Jeremy Siegel: “If You’re a Long-Term Investor, I Would Absolutely Buy Now”
Jeremy Siegel is a professor of finance at the Wharton School of the University of Pennsylvania and is a notable commentator on the economy and capital markets. Mr. Siegel recently appeared on CNBC’s ‘Squawk Box’ where he discussed his view on why now is an attractive buying opportunity for long-term investors. Here are some comments from the professor of finance at one of the top business schools in the world:
“If you’re a long-term investor, I would absolutely buy now. I think these are absolutely great long-term values. Could it go down more? Of course in the short-run and in bear markets (historical), it has gone down more. But when you’re talking about 16 times earnings and even if they are clipped by a recession, you shouldn’t just base it on recession earnings you should base it on longer-term earnings, which I think are very favorable looking beyond the dip. I think these are just absolutely excellent values. Short-term, anything can happen in the short term.”
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).
Photo by Roberto Júnior on Unsplash
Our Methodology
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.
Best Long-Term Stocks To Buy Now
11. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 55
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%.
On August 1, Wells Fargo analyst Chris Carey raised his price target on Colgate-Palmolive Company (NYSE:CL) to $80 from $71 and upgraded the stock to Equal Weight from Underweight. This August, Barclays analyst Lauren Lieberman raised his price target on Colgate-Palmolive Company (NYSE:CL) to $74 from $71 and maintained an Equal Weight rating on the shares.
At the end of Q2 2022, 55 hedge funds held stakes in Colgate-Palmolive Company (NYSE:CL). The total value of these stakes amounted to $2.93 billion, up from $2.59 billion a quarter ago, with 50 positions. The hedge fund sentiment for the stock is positive.
As of June 30, First Eagle Investment Management is the largest investor in Colgate-Palmolive Company (NYSE:CL) and has stakes worth $899 million in the company.
Here is what First Eagle Investments had to say about Colgate-Palmolive Company (NYSE:CL) in its second-quarter 2022 investor letter:
“Shares of consumer staples giant Colgate-Palmolive have performed well as investors rotated into more recessionary-resilient defensive stocks amid the broader selloff during the second quarter. The company raised revenue guidance for 2022 but lowered its margin outlook because of higher costs for raw materials, packaging and logistics; we believe that the company’s size and market share provide it with options to mitigate the inflation challenges it faces. We continue to like Colgate- Palmolive’s dividend and previously announced $5 billion stock buyback program.”
10. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 60
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.
Wall Street is bullish on The Coca-Cola Company (NYSE:KO) and sees upside to the stock. This July, Deutsche Bank analyst Steve Powers raised his price target on The Coca-Cola Company (NYSE:KO) to $65 from $64 and maintained a Hold rating on the shares. On September 6, HSBC analyst Carlos Laboy raised his price target on The Coca-Cola Company (NYSE:KO) to $76 from $72 and reiterated a Buy rating on the shares.
As of June 30, Berkshire Hathaway is the largest shareholder in The Coca-Cola Company (NYSE:KO) and owns 400 million shares. Warren Buffett has owned the stock for over a decade and the investment covers 8.38% of his hedge fund’s second-quarter 2022 investment portfolio.
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).
9. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 64
On September 22, Costco Wholesale Corporation (NASDAQ:COST) released earnings for the fourth quarter of fiscal 2022. The company reported earnings per share of $4.20 and generated a revenue of $72 billion, up 15% year over year, and ahead of Wall Street estimates by $90 million. As of October 5, the stock has gained 6.8% over the past twelve months.
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.
Shortly after the company’s earnings release, Jefferies analyst Corey Tarlowe reiterated his $610 price target and Buy rating on Costco Wholesale Corporation (NASDAQ:COST) and also said that the stock remains his “top pick”.
At the end of Q2 2022, 64 hedge funds were bullish on Costco Wholesale Corporation (NASDAQ:COST) and held stakes worth $4.76 billion in the company. This is compared to 61 hedge funds in the preceding quarter with stakes worth $5.41 billion.
As of June 30, Fisher Asset Management is the leading shareholder in Costco Wholesale Corporation (NASDAQ:COST) and has stakes of more than $2 billion in the company. The investment covers 1.47% of Ken Fisher’s 13F portfolio.
8. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 67
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.
Analysts see upside to Walmart Inc. (NYSE:WMT). This August, Morgan Stanley analyst Simeon Gutman raised his price target on Walmart Inc. (NYSE:WMT) to $150 from $145 and maintained a buy-side Overweight rating on the shares. On September 14, KeyBanc analyst Bradley Thomas started coverage of Walmart Inc. (NYSE:WMT) with an Overweight rating and a $155 price target.
Walmart Inc. (NYSE:WMT) is a prominent backer of the metaverse. On September 26, the company launched two new experiences, Walmart Land and Walmart’s Universe of Play, in Roblox Corporation’s (NASDAQ:RBLX) metaverse platform. The Walmart Land and Walmart’s Universe of Play feature Walmart’s aisles in a virtual world.
At the end of Q2 2022, 67 hedge funds disclosed ownership of stakes in Walmart Inc. (NYSE:WMT). These funds held collective stakes of $3.78 billion in the company. As of June 30, GQG Partners owns more than 9.8 million shares of Walmart Inc. (NYSE:WMT) and is the most prominent investor in the company.
7. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 71
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.
The Procter & Gamble Company (NYSE:PG) has a consensus Buy rating among Wall Street analysts. On August 2, Barclays analyst Lauren Lieberman revised her price target on The Procter & Gamble Company (NYSE:PG) to $154 from $157 and maintained a buy-side Overweight rating on the shares.
At the end of the second quarter of 2022, 71 hedge funds were eager on The Procter & Gamble Company (NYSE:PG) and held stakes worth $5.53 billion in the company. As of June 30, Bridgewater Associates is the largest shareholder in the company and has stakes worth $970 million. The investment covers 4.1% of Ray Dalio’s 13F portfolio.
Like The Procter & Gamble Company (NYSE:PG), other profitable cash-rich companies include Johnson & Johnson (NYSE:JNJ), NVIDIA Corporation (NASDAQ:NVDA), and Microsoft Corporation (NASDAQ:MSFT).
6. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 79
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.
Analysts are bullish on Merck & Co., Inc. (NYSE:MRK). On August 25, Erste Group analyst Hans Engel upgraded Merck & Co, Inc. (NYSE:MRK) to Buy from Hold. The analyst noted that the company is leading its sector and has above-average profitability. On September 14, Berenberg analyst Luisa Hector raised her price target on Merck & Co., Inc. (NYSE:MRK) to $100 from $95 and upgraded the stock to Buy from Hold. As of October 5, Merck & Co., Inc. (NYSE:MRK) has gained 14.75% year to date and has a trailing twelve-month operating margin of 34.9%.
At the close of Q2 2022, 79 hedge funds were bullish on Merck & Co., Inc. (NYSE:MRK) and held stakes worth $6.11 billion in the company. This is compared to 84 hedge funds in Q1 2022 with stakes worth $5.86 billion.
As of June 30, Fisher Asset Management owns more than 12 million shares of Merck & Co., Inc. (NYSE:MRK) and is the largest investor in the company. The investment covers 0.78% of Ken Fisher’s 13F portfolio.
Here is what Chartwell Investment Partners had to say about Merck & Co., Inc. (NYSE:MRK) in its second-quarter 2022 investor letter:
“In the Dividend Equity accounts, the three best performers in Q2 includes Merck (NYSE:MRK, 3.6%), up 12.0%. Merck, like other pharma companies, is in a defensive business, but the stock also did well as peak-sales estimates for their flagship drug, Keytruda, have gone up (JPMorgan estimates $32 billion in sales by 2026).”
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Disclosure: None. 11 Best Long-Term Stocks To Buy Now is originally published on Insider Monkey.