7 of the Best Long-Term Stocks to Buy

Analysts say these stocks may shine in the long run.

The stimulus-driven stock market rally has come to a screeching halt in 2022. Inflation remains at its highest level in decades despite aggressive Federal Reserve interest rate hikes. The U.S. housing market has cooled, Russia’s invasion of Ukraine has created energy market uncertainty and a strong U.S. dollar has pressured U.S. companies that have international businesses. In such an unpredictable environment, investors are seeking the comfort of high-quality, long-term investments. Here are eight long-term stocks to buy — as recommended by Bank of America analysts — that also have A+ quality ratings from S&P Global Market Intelligence.

UnitedHealth Group Inc. (ticker: UNH)

UnitedHealth is the largest U.S. managed health care firm, providing health plans and health care services for a wide range of customers. Analyst Kevin Fischbeck says UnitedHealth’s scale and diversification provide stability and protection for investors, while the company’s Optum pharmacy benefit manager and health care provider business is a unique growth opportunity. In the most recent quarter, UnitedHealth reported more than $5 billion in net income, and Fischbeck projects the company’s double-digit earnings per share, or EPS, growth will continue in 2023 and 2024. Bank of America has a “buy” rating and $632 price target for UNH stock, which closed at $504.85 on Oct. 7.

Home Depot Inc. (HD)

Home Depot is a leading North American home improvement retail store operator. Home Depot shares also have the highest dividend yield on this list at 2.6%. The pandemic housing market boom has cooled in 2022, as Fed rate hikes have made mortgages less affordable. However, analyst Elizabeth Suzuki says professional home improvement customer demand has been resilient. Suzuki says she expects home investment levels to remain elevated in the near term and also projects a favorable long-term outlook for the industry. Bank of America has a “buy” rating and $360 price target for HD stock, which closed at $284.32 on Oct. 7.

Mastercard Inc. (MA)

Mastercard is a leading credit card and digital payments network. Analyst Jason Kupferberg says Mastercard is well positioned to capitalize on future acceleration in economic growth, consumer spending and travel. Kupferberg projects 17.8% EPS growth in 2023 and 20.1% EPS growth in 2024 and says Mastercard shares are attractively valued given the company’s impressive outlook. In the long term, the ongoing secular shift from cash and checks to digital and mobile payments should serve as a tail wind for Mastercard, and Kupferberg says the stock is recession resistant. Bank of America has a “buy” rating and $400 price target for MA stock, which closed at $294.97 on Oct. 7.

Thermo Fisher Scientific Inc. (TMO)

Thermo Fisher Scientific produces analytical instruments and provides laboratory services for life sciences, pharmaceutical and industrial applications. Analyst Derik de Bruin says Thermo Fisher’s strategy of adding complementary technologies via acquisitions in high-growth markets has positioned the company well for double-digit EPS growth over the next several years. In addition, de Bruin says Thermo Fisher is streamlining its operations, and the company’s low exposure to heavy industrial customers and high mix of recurring revenue make it an attractive defensive investment in an uncertain environment. Bank of America has a “buy” rating and $700 price target for TMO stock, which closed at $523.61 on Oct. 7.

Accenture PLC (ACN)

Accenture is a leading global consulting, technology and outsourcing services firm. Accenture shares are down more than 35% this year, making it the worst-performing stock on this list. However, Kupferberg says the sell-off is an attractive buying opportunity for long-term investors. He says Accenture’s underlying revenue and booking trends remain healthy. Foreign exchange pressures are now fully priced into the stock, and Kupferberg says the company’s market share gains and diversified business model will help generate significant upside for long-term investors. Bank of America has a “buy” rating and $358 price target for ACN stock, which closed at $259.71 on Oct. 7.

Lowe’s Cos. Inc. (LOW)

Lowe’s is another leading home improvement retailer, and Suzuki says the company will also benefit from the same tail winds driving Home Depot’s long-term outperformance. Suzuki says home renovation demand remains elevated and there is still a bloated backlog of professional projects. In addition, she says many Canadian and U.S. consumers are still spending more time and money at home than they did prior to the pandemic. She is bullish on Lowe’s combination of market share gains, margin growth, share buybacks and dividend hikes. Bank of America has a “buy” rating and $278 price target for LOW stock, which closed at $197.21 on Oct. 7.

Northrop Grumman Corp. (NOC)

Northrop Grumman is one of the largest U.S. government defense contractors, providing aerospace products and advanced military technology. Defense stocks have performed well in 2022, thanks to a ramp-up in global defense spending in the wake of Russia’s invasion of Ukraine. Northrop shares are up 28.2% this year as of market close on Oct. 7, making it the best-performing stock on this list. Analyst Ronald Epstein says Northrop generates high-quality earnings and impressive free cash flow. Its long-term government contracts also make it an attractive defensive investment during economic downturns. Bank of America has a “buy” rating and $550 price target for NOC stock, which closed at $496.09 on Oct. 7.

7 of the best long-term stocks to buy:

— UnitedHealth Group Inc. (UNH)

— Home Depot Inc. (HD)

— Mastercard Inc. (MA)

— Thermo Fisher Scientific Inc. (TMO)

— Accenture PLC (ACN)

— Lowe’s Cos. Inc. (LOW)

— Northrop Grumman Corp. (NOC)

More from U.S. News

7 Stocks That Are Good Inflation Investments

7 Best Consumer Staples Stocks to Buy

9 Dividend Aristocrat Stocks to Buy Now

7 of the Best Long-Term Stocks to Buy originally appeared on usnews.com

Update 10/10/22: This story was published at an earlier date and has been updated with new information.

Related Categories:

Latest News

More from WTOP

Log in to your WTOP account for notifications and alerts customized for you.

Sign up