7 Best Long-Term Stocks to Buy Right Now

An uncertain economic outlook calls for a long-term stock strategy.

With the S&P 500 down over 17% this year as of Dec. 7, investors are ready to bid “good riddance” to 2022. Now, they turn their attention to 2023, hoping for an end to high inflation, high interest rates, a roiling housing market and a skidding economy. With no guarantee any of these things will actually happen, investors should look deeper into the horizon and focus on high-quality, no-nonsense stocks that can produce gains in the long run. These low-debt, stable-earning, dividend-friendly long-haul stocks deserve attention for market mavens looking to flip the calendar — and flip the switch — into 2023.

UnitedHealth Group Inc. (ticker: UNH)

UnitedHealth genuinely flipped the switch in 2022, returning 18.3% to shareholders in the past 12 months, as S&P 500 stocks largely produced the opposite, on average. Its shares closed at $542.91 on Dec. 7, and UnitedHealth has seen nine industry analysts upgrade their 12-month target price on its stock in the past 90 days. The consensus? A UNH stock price target of $608, with a high of $635 and a low of $587 in the next three months. UnitedHealth continues to benefit from top-line revenues and a robust market position, with a slew of new deals and partnerships on the calendar for 2023. While risks may be in play as COVID-19 and rising health care industry operating margins continue to linger, UNH’s solid balance sheet and close ties to massive U.S. government health care investments should make UNH a mainstay for the long haul.

Home Depot Inc. (HD)

Home Depot, North America’s predominant home improvement retail powerhouse, is finishing 2022 strong, with share prices rising by over 12% since mid-November, as consumers edge their way back into retail spending mode. With a solid 2.4% dividend yield and a well-trusted and widely recognized brand name, HD proved resilient in 2022. Even with record-high inflation, HD reported a 5.6% increase in net sales over the past year, to $38.9 billion. Analysts that cover HD see more of the same going forward, with an eye-popping 15.7% annual diluted EPS growth rate for the company through 2027. Wedbush recently assigned an “outperform” call on HD, while Sanford C. Bernstein issued a price target of $337 on HD stock. That’s a 5.3% price difference from Home Depot’s share price as of Dec. 7.

Johnson & Johnson (JNJ)

Johnson & Johnson is another corporate giant that’s withstood the 2022 stock market decline. The company’s share price has held the line, producing gains of 11.3% in the past year as of Dec. 7, and once again stands tall among dividend kings, having boosted its quarterly dividends every year over the past 60 years. True to form, JNJ hiked its dividend by 6.6% in 2022, and its dividend yield is now 2.6%. With J&J in the hunt for Horizon Therapeutics PLC (HZNP), a rheumatic disease therapeutics firm that posted $925 million in sales in the third quarter, the company offers long-term investors both growth and stability heading into 2023. A new investor survey by Jeffries pointed to JNJ as the most likely landing spot for Horizon. If the deal goes through, the Horizon buy would be the largest health care acquisition of 2022 — surpassed only by J&J’s recent agreement to purchase Abiomed Inc. (AMBD), a heart device manufacturer, for $16.6 billion.

Costco Wholesale Corp. (COST)

Costco is one of those retailers that attract business in good times and bad times, as customers either look to save by buying bulk goods during recessionary periods or just load up on groceries and household products when the economy is humming. Total sales were up 5.3% from November 2021 to November 2022, proving once again Costco’s resilience in tough economic times. Bernstein recently issued an “outperform” rating on COST, with a target share price of $586, after citing the retail box store behemoth’s propensity to deliver better-than-expected quarterly results. Costco is expected to announce that earnings should rise by 9% in fiscal year 2023, with another 9% rise in fiscal 2024. As a longtime dominant giant in the big-box retail space with a robust track record of growth, Costco belongs on any list of top long-term stocks in 2023 — and likely much longer.

Mastercard Inc. (MA)

Mastercard, a worldwide leader in credit card and digital payments, is delivering the goods in late 2022. The company recently raised its quarterly dividend by 16% and announced a $9 billion share buyback program, which follows an $8 billion buyback program that’s about 50% complete. With 11% growth in gross dollar volume for its most recent quarter but modest fourth-quarter earnings estimates, the company is being cautious in a tough economy going forward, analysts say. “MA’s nominal 4Q guidance falling below consensus may hurt the stock (in the short term),” said Mizuho analyst Dan Dolev in a recent research note. “However, we believe that there is nothing wrong with being prudent.” With a strong “buy” call from 32 analysts who track MA, and with an average target price of $395 — a 13.7% price difference from its current share price of $347.42 as of Dec. 7 — expect Mastercard to be around for the long haul.

Lowe’s Cos. Inc. (LOW)

Like Home Depot, Lowe’s is another leading home improvement retailer with solid long-term prospects that should benefit from the same tail winds driving Home Depot’s long-term outperformance. On Dec. 7, Lowe’s revealed both its outlook and long-term growth plans, while also announcing a $15 billion share buyback program. Lowe’s also called for next year’s total sales to clock in between $87 billion and $92 billion, which represents a slide from the roughly $98 billion in sales Lowe’s expects in 2022. That said, long-term prospects look healthy for Lowe’s. Same-store sales growth for the most recent quarter rose 2.2%, while its high-margin Lowe’s Pro membership program, focused on contractors and home-remodeling projects, rose by 16% on a year-to-year basis. That helps Lowe’s better compete with high-profile rivals like Home Depot. Cowen analysts noted that while Lowe’s may have some short-term hiccups, they’re bullish on the stock for the long haul, based on “strengthening fundamentals,” especially in key areas such as margin growth, share buybacks and dividend hikes.

Northrop Grumman Corp. (NOC)

Northrop Grumman, like most big defense stocks, is significantly outperforming the broader stock market in 2022, with its share price up 39.4% on a year-to-date basis through Dec. 7. The company, which manufactures defense-heavy products like counter-artillery equipment, aircraft surveillance systems and F-35 fighter jets (along with Lockheed Martin Corp. (LMT) and others), issued lower-than-expected guidance in its third-quarter earnings report. Still, the company represents the most optimal growth prospects among defense industry stocks going forward, according to Vertical Research Partners analyst Robert Stallard. Northrop Grumman has a big ace in its pocket with the rollout of the futuristic, pilot-free B-21 bomber aircraft. Selling for $700 million each and built by Grumman, the B-21 “will last for decades,” U.S. Defense Secretary Lloyd Austin said on Dec. 2 at the B-21’s unveiling in Palmdale, Calif. NOC’s long-term government contracts also fuel the company’s long-term growth, especially as a desirable defensive investment in any recessionary climate.

7 of the best long-term stocks to buy:

— UnitedHealth Group Inc. (UNH)

— Home Depot Inc. (HD)

— Johnson & Johnson (JNJ)

— Costco Wholesale Corp. (COST)

— Mastercard Inc. (MA)

— Lowe’s Cos. Inc. (LOW)

— Northrop Grumman Corp. (NOC)

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