10 Best Stocks for Long-Term Investment • Benzinga

The stock market has rewarded many long-term investors with dividends and capital gains. While the stock market is a popular resource for generating wealth, some stocks perform better than others. Finding long-term investment opportunities can lead to good returns while spending less time in your portfolio. This guide will cover some stocks to consider for the long haul.

Investors can choose from thousands of companies that are publicly listed in the stock market. These are 10 of the best long-term stocks to consider.

Axcelis is a small company with a market cap under $6 billion that has emerged as a top player in the semiconductor industry. The company’s ion implantation technology allows chipmakers to produce the transistors that power all electronics. Shares have gained over 700% within the past five years. Despite that level of growth, the stock only trades at a 28 price-to-earnings (P/E) ratio. In its second-quarter earnings report, Axcelis Technologies reported 23.9% year-over-year revenue growth and 39.35% year-over-year net income growth. The company had a 22.5% net profit margin in that quarter.

Fortinet is a high-growth cybersecurity stock that has almost quadrupled over the past five years. Companies use Fortinet’s software to increase their cybersecurity, and with the rise of high-profile attacks, Fortinet’s services are more important than ever. Fortinet backs up high revenue growth with high earnings growth as well. The company reported 25.5% year-over-year revenue growth in the second quarter and 53.5% year-over-year net income growth in the same quarter. Fortinet has been profitable according to generally accepted accounting practices (GAAP) and has maintained positive free cash flow every year since 2009. A recent pullback has the stock trading at a 43 P/E ratio.

Microsoft is a tech conglomerate with exposure to PCs, video game consoles, the cloud and other business segments. Microsoft Azure is a big profit-maker for the company and has helped it reward shareholders with a nearly 200% gain over the past five years. Microsoft recently reported 8.3% year-over-year revenue growth and 20% year-over-year net income growth. The company has a 25.7% profit margin.

Public Storage is a real estate investment trust with the largest portfolio of self-storage facilities. The firm has an occupancy rate above 90% and has branched beyond self-storage. Public Storage also serves clients seeking business solutions, storage for vehicles and boats and climate-controlled storage. Shares have gained roughly 30% over the past five years, but the main attraction for income investors is the company’s 4.25% dividend yield. Self-storage tends to be resilient during recessions and can continue to deliver cash flow during economic uncertainty.

American Express is a financial services company that specializes in credit and debit cards. The company is one of the 30 stocks in the Dow Index and has double-digit profit margins. The company recently reported 6.7% year-over-year revenue growth and 10.7% year-over-year net income growth in the second quarter. American Express has been in business since 1850 and currently trades at a 17 P/E ratio. Investors get to enjoy a 1.5% dividend yield at current levels, which is higher than Visa Inc. and Mastercard Inc.’s dividend yields.

Amazon is a tech conglomerate that has exposure to e-commerce, cloud technology, Twitch, advertising and other revenue-generating opportunities. Amazon has returned over 60% year to date for investors and reported double-digit revenue growth in the second quarter. The company has many business segments that can generate meaningful growth and reward long-term investors.

Alphabet has been making attempts to diversify beyond online advertising, but Google and YouTube ads still make up the majority of the company’s revenue. Its duopoly status with Meta Platforms Inc. makes it a top ad-tech giant to consider. Shares have more than doubled over the past five years and currently trade at a 29 P/E ratio. If the advertising industry continues its recovery, Alphabet tends to benefit and reward shareholders. 

JPMorgan is the largest U.S. bank by assets under management. Some of the bank branches that are now a part of the conglomerate were founded hundreds of years ago. JPMorgan recently acquired First Republic Bank and has the financial might to outperform many bank stocks. JPMorgan reported 20.6% year-over-year revenue growth and 67.3% year-over-year net income growth in the second quarter. The bank has a 10 P/E ratio and a 2.6% dividend yield. 

The Trade Desk is a high-growth advertising company that specializes in CTV Television Network ads. Shares have jumped by over 550% within the past five years because of incredible top- and bottom-line growth. The company reported 21.4% year-over-year revenue growth in the second quarter. The Trade Desk gives advertisers more data, which can help clients make better decisions with their ad spend. The Trade Desk has been profitable since 2013. 

Perion is a small ad-tech company that specializes in search, social media and display ads. The firm has a $1.6 billion market cap and a 15 P/E ratio. Perion reported year-over-year revenue and earnings growth in each quarter in 2022. During this same time, many ad companies reported declining revenue and net income. Perion has a good history of beating guidance and raising expectations. The company reported 21.7% year-over-year revenue growth and 9.8% year-over-year net income growth in the second quarter.

Long-term stocks are investments consumers plan to buy and hold for several years. These investors like the company’s fundamentals and tend to hold onto shares during bullish and bearish markets.

Long-term stock investors look at the fundamental analysis when reviewing an asset. They focus on what a stock can be worth in a few years. Short-term stock investors focus on technical analysis and price fluctuations. Short-term stock investors predict how much a stock can be worth in a few weeks by reviewing technical indicators.

Investing in long-term stocks can generate higher returns and decrease the amount of time you spend in your portfolio. If you sell a long-term stock in a few years, you will get taxed at the long-term capital gains rate. This rate is more favorable than the short-term capital gains rate you have to pay if you hold onto a stock for less than 365 days. 

Investors can choose from several long-term stocks. Focusing on these factors can increase the likelihood of buying profitable long-term investments.

Investors should look at changes to a company’s year-over-year revenue and earnings. The balance sheet and valuation offer more insights into a company and can help investors make optimal decisions for their portfolios.

Every company has competitors, and they all operate within the same industry. Industry woes will drag down most, if not all, of the companies within that industry. However, rising demand for the industry can lift the stocks in that sector. Some exceptions apply and can indicate compelling buying opportunities or red flags.

Some investors look at a company’s dividend history to see whether it raises the dividend each year. Dividend hikes indicate confidence and increase an investor’s cash flow. Some investors prefer growth stocks with high potential returns that do not offer dividends. However, if a stock offers dividends, you should check its history to see whether the company has been raising the dividend each year.

Valuation metrics can help you determine whether a stock is fairly priced, undervalued or risky. The P/E ratio is a useful metric for investors focusing on profitable companies. Some investors also look at the PEG ratio to gauge whether the company is fairly valued based on its future growth potential. 

Investors should review their portfolios before adding new positions. Overexposure to one stock or sector can leave your portfolio vulnerable during contractions. Spreading your capital across various stocks and sectors minimizes your risk. Investors should consider their risk tolerances before making investments.

Investors can choose from many long-term stocks. It is a good idea to continue monitoring the market and looking for new opportunities. However, investors can also benefit from comparing brokers and finding better choices. Some brokers have lower fees and more features than what your current broker offers. If you are on the fence or want to see whether a better broker is available, these are some of the top choices to consider.

Long-term stocks are valuable assets that can help you accumulate long-term wealth. Making consistent investments can set you up for a better retirement. Carefully analyzing your portfolio, promising stocks and your risk can increase the chances of profitable investments.