Best Long Term Stocks To Buy Right Now [UPDATED]
The stimulus-driven, post-pandemic stock market rally came to a screeching halt in 2022. Fortunately, inflation is now trending steadily lower following nearly a year of aggressive Federal Reserve interest rate hikes. The U.S. housing market has cooled and earnings growth has slowed, but investors are increasingly optimistic that the U.S. economy can avoid a severe recession in 2023. In such an unpredictable environment, investors are seeking the comfort of high-quality, long-term investments. Here are seven long-term stocks to buy that Bank of America analysts recommend which also have A+ quality ratings from S&P Global Market Intelligence.
best long term stocks to buy right now
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.
Please note that the stocks above were selected by an experienced financial analyst, but they may not be right for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance.
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 by healthcare reforms under the Inflation Reduction Act (IRA) than peers."
Archer-Daniels-Midland (ADM (opens in new tab), $81.61) buys, transports and processes food commodities. An inflation hedge, ADM stock has been a big winner over the last year, benefiting from rising prices caused by supply-chain disruptions. Food scarcity seems like a longer-term problem, and the stock is reasonably priced at a forward P/E of 12.
Morgan Stanley (opens in new tab) analyst Matthew Harrison upgraded the stock recently to Overweight, the equivalent of Buy, citing the strength of the company's pipeline and the stock's undervalued price. Amgen shares have gained about 7% over the past 12 months but trade at 13 times 2023 expected earnings, a fraction of the P/E of 70 that's typical for biotech firms. With all this in mind, it's easy to see why AMGN is on this list of the best stocks to buy now.
Looking to build upon this track record, these two contrasting businesses represent fantastic buy-and-hold opportunities for the long term, regardless of what turns the market may take over the next few quarters.
Dividend stocks are popular among older investors because they produce a regular income, and the best stocks grow that dividend over time, so you can earn more than you would with the fixed payout of a bond. REITs are one popular form of dividend stock.
Overview: In many ways, real estate is the prototypical long-term investment. It takes a good bit of money to get started, the commissions are quite high, and the returns often come from holding an asset for a long time and rarely over just a few years.
While any time can be good to invest for the long term, it can be especially advantageous when stocks have already fallen a lot, for example, during recessions. Lower stock prices offer an opportunity to buy stocks at a discount, potentially offering higher long-term returns. However, when stocks fall substantially many investors become too afraid to buy and take advantage.
Long-term investments give you the opportunity to earn more than you can from short-term investments. The catch is that you have to take a long-term perspective, and not be scared out of the market because the investment has fallen or because you want to sell for a quick profit.
During the fourth-quarter earnings call, AMD CEO Lisa Su said, "We believe that AI is a huge driver of compute growth. And given our portfolio, it should be a driver of our growth as well." Following its acquisition of Xilinx, management estimated its long-term addressable market at $135 billion across cloud, edge computing (e.g. 5G and automotive), and intelligent devices.
The long-term trends driving demand for more computing power are good reasons to consider buying shares of AMD. With the stock trading 52% off its previous high, now would be a great time to buy before the next bull market.
United Healthcare is likely the most defensive stock on this list of long-term stocks to hold. When the economy slows, investors often shift away from high-growth stocks to those in traditionally defensive industries like utilities and healthcare.
United Healthcare is the largest healthcare company in the U.S. and Canada by a large margin, with a 14.47% market share as of 2021, nearly double that of 2nd-place Kaiser. The stock actually posted a small gain of 2.84% in 2022, right in the midst of a bear market that dragged down the S&P 500 index by 20%. But this is par for the course, as UNH has a long-term record of consistent stock price gains. As a kicker, the shares also pay out a 1.35% dividend.
With its massive influence on multiple industries and its value-boosting strategic investments, Berkshire Hathaway is among the best long-term stocks to invest in. And if the nearly $500,000 price point is a little high for you, consider investing in its BRK-B shares at a friendlier $300-range price.
In its most recent quarter, renewals in the U.S. and Canada came in at an impressive 92.5% clip. Costco also posted sales gains of 15.4% in Q4 2022, reflecting its ability to take market share in all environments. Yet, the stock still fell about 20% in 2022, perhaps offering long-term investors an attractive entry point.
Global tech giant Apple constantly develops and manufactures smartphones and computers that are in high demand. That demand coupled with strong, reliable financials is what makes AAPL among the best long-term stocks to invest in. 041b061a72