While it’s certainly true that past performance is not indicative of future results, it can be asserted with confidence that the stock market tends to go up over time. Put another way, stocks have proven themselves to be excellent long-term investments.
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Some professional and individual investors trade the market actively. They attempt to maximize profits by trying to pick the most opportune entry and exit points and making educated guesses about market tops and bottoms. This approach might work for some but is probably not appropriate for most people. Timing the markets is a difficult and time-consuming task.
For most retail investors who are building personal portfolios, buying high-quality stocks with good long-term growth prospects and holding them for the long haul is the best strategy.
Buying and holding stocks allows investors to benefit from the overall growth of the markets and world economy. Holding, rather than trading stocks, allows investors to focus on fundamentals rather than technical factors or the short-term ups and downs of the market. Although bear markets and drawdowns are inevitable, staying in the market through various economic and business cycles reduces the risk of missing out on bull markets and big upswings.
There are other benefits to being a long-term investor as well. Buying stocks and holding on to them is a less expensive and more tax-efficient approach to equity investing.
Overall, holding stocks for the long run will produce better returns with less effort. This is the rationale behind our list of the seven best long-term stocks to buy today and hang on to for the future.
| Stock | Sector | Market Capitalization* | Trailing 12-month dividend yield* |
| International Business Machines Corp. (ticker: IBM) | Technology | $167 billion | 3.6% |
| Abbott Laboratories (ABT) | Health care | $193 billion | 1.9% |
| Stanley Black & Decker Inc. (SWK) | Industrials | $14.1 billion | 3.5% |
| Atmos Energy Corp. (ATO) | Utilities | $17.2 billion | 2.7% |
| T. Rowe Price Group Inc. (TROW) | Financials | $25.8 billion | 4.3% |
| Chevron Corp. (CVX) | Energy | $293.7 billion | 3.9% |
| McCormick & Co. Inc. (MKC) | Consumer defensive | $18.1 billion | 2.3% |
*As of April 12 closing price.
International Business Machines Corp. (IBM)
IBM was founded in New York City in 1911 when four prominent business machine manufacturing companies merged to form a single organization. The new firm was called The Computing Tabulating Recording Company. It went public in an IPO conducted in 1915 and changed its name to International Business Machines in 1924.
Today, IBM is a large-cap company that provides high-tech, integrated business solutions and consulting services to customers all over the world. The company has four divisions: software, business consulting, infrastructure and financing.
The software division operates in the cloud and offers onsite solutions. It uses advanced artificial intelligence platforms to improve efficiency and lower costs for its enterprise customers. The consulting division takes a hands-on approach to working with clients and developing appropriate technology and operating strategies. In the infrastructure segment, IBM professionals install on-premises hardware systems like computers and servers, which will work throughout the various lifecycles of a business. Finally, the financing division offers credit and financial installment plans to customers who buy the company’s hardware, software and ancillary services.
Wall Street estimates that IBM will generate $58.8 billion in revenue and produce $9.30 in earnings per share in 2024.
Market cap: $167 billion 12-month yield: 3.6% Sector: Technology
Abbott Laboratories (ABT)
ABT is a premier health care company that develops, manufactures and distributes pharmaceuticals, diagnostics, nutritional products and medical equipment and devices worldwide.
The company has a thriving generic drug division that generates significant revenue and nicely complements its name-brand offerings. ABT also sells one of the most popular and widely used versions of the flu vaccine available today. In addition, it is making a sustained push to gain and maintain a market leadership position in the areas of immunology and immunotherapy.
The 25 Wall Street analysts who follow the company are estimating $42 billion in 2024 revenue for ABT. They are expecting that number to grow by 7% to $45 billion in 2025.
The stock has an annualized dividend of $2.20, which it distributes quarterly. Long-term investors with an income orientation will be encouraged to learn that ABT has increased its dividend for 51 consecutive years.
Market cap: $193 billion 12-month yield: 1.9% Sector: Health care
Stanley Black & Decker Inc. (SWK)
SWK is a 181-year-old company that was founded in New Britain, Connecticut, way back in 1843. The firm is well known as a manufacturer of quality hand tools, power tools and outdoor products. SWK has customers all over the world, most prominently in North America, Europe and Asia.
In addition to its namesake brand, Black & Decker, the company makes and distributes several other famous tool and equipment brands including Dewalt, Craftsman and Cub Cadet.
The array of products that SWK produces is truly impressive. The company makes everything from sledgehammers, electric drills and power sanders to vacuums, appliances and everything in between. It also has a large and growing market share in simple fasteners, such as nails, nuts and bolts, screws, rivets, and more.
On the strength of its brands and well-established reputation for quality, SWK is expected to earn $4.13 in earnings per share on $15.5 billion in revenue in fiscal 2024.
Market cap: $14.1 billion 12-month yield: 3.5% Sector: Industrials
[READ: 6 Best Cheap Dividend Stocks to Buy Under $10]
Atmos Energy Corp. (ATO)
ATO is a 118-year-old regulated natural gas utility that makes its headquarters in Dallas. The company is engaged in both the midstream and downstream areas of the energy industry, meaning it is involved in moving, storing and distributing natural gas. Its regulated service areas include large sections of Colorado, Kansas, Kentucky, Louisiana, Mississippi, Tennessee, Texas and Virginia. Its residential and commercial customers number more than 3.3 million.
Through its pipeline division, ATO owns and operates more than 73,600 miles of gas-line distribution and transmission mains. This extensive network of underground pipelines isn’t just for the company’s own customers. ATO transports natural gas for several other third-party providers. It’s very rare for a public utility to have this big of a presence in the pipeline sector of the industry.
ATO’s 2024 revenue from operations is estimated to be $4.8 billion, and it is expected to report EPS of $6.61 for the year. Wall Street is looking for $7.05 in EPS in 2025 — a substantial 6.6% increase in earnings.
Investors can also look forward to an annualized dividend of $3.22 per share.
Market cap: $17.2 billion 12-month yield: 2.7% Sector: Utilities
T. Rowe Price Group Inc. (TROW)
TROW is an 87-year-old, Maryland-based asset manager who can boast more than $1.5 trillion in assets under management, or AUM. The firm markets an extensive selection of mutual funds and exchange-traded funds, or ETFs, to high-net-worth individuals, institutions and retirement plans. Investors can buy TROW funds directly or through financial intermediaries such as brokers and registered investment advisors.
As large and experienced as TROW is, it does not develop, manage or market derivative securities funds or commodities funds. This old-fashioned money manager sticks to publicly traded equities and fixed-income products of U.S. and international companies. It does its own investment research and makes allocation decisions in-house.
Its headquarters are in Baltimore, but it has established offices in several of the world’s leading financial centers, including Tokyo, Zurich, Singapore and the United Arab Emirates.
If Wall Street estimates are to be trusted, TROW will generate $6.89 billion in revenue in 2024 and grow that 3.4%, to $7.13 billion in 2025.
Market cap: $25.8 billion 12-month yield: 4.3% Sector: Financials
Chevron Corp. (CVX)
There are several good reasons CVX appears on our list of the seven best long-term stocks to buy and hold. One of the most important is the fact that this mega-cap energy firm is a member of the exclusive Dividend Aristocrats club and has raised its annual dividend for 36 consecutive years. That dividend currently stands at $6.52 a share but, if history is any guide, investors can expect it to climb each year.
CVX specializes in oil, natural gas and petrochemicals. It operates in both the upstream and the downstream segments of the industry. Upstream refers to the exploration, development and production of energy sources. Downstream means refining, processing and distribution of energy products.
The company’s products include gasoline and diesel fuel to power commercial and private vehicles, natural gas for heating, and petrochemicals used in lubricants, solvents and plastics. Its size and international scope will allow CVX to generate an estimated $181.8 billion in revenue in 2024.
The equity research arms of both Goldman Sachs Group Inc. (GS) and UBS Group AG (UBS) have had a “buy” rating on CVX, and both reiterated that rating in research notes in early April of this year.
Market cap: $293.7 billion 12-month yield: 3.9% Sector: Energy
McCormick & Co. Inc. (MKC)
MKC was founded in 1889 and, over its 135 years of operation, has become an iconic American company. MKC is famous for its spices, seasonings and flavorings, which are ubiquitous in homes and restaurants all over the U.S. Many consumers and investors don’t know that it is well established in the processed foods and condiments segment as well.
MKC owns well-known brands such as French’s, Lawry’s, RedHot, Old Bay and more. The company has been very successful in adapting its spices and food products to its international customers in Europe and Asia. Examples of this success are its Ducros and La Drogheria brands, which are popular in Europe, and its Gourmet Garden brand, which sells well in China.
Another lesser-known but very productive aspect of the firm’s business is its private-label product program. Under the private label program, MKC provides generic versions of its spices, sauces and other products to retailers and grocery stores and allows those stores to market the items under their own name.
Wall Street is expecting $2.87 in EPS on $6.6 billion in revenue in 2024.
Market cap: $18.1 billion 12-month yield: 2.3% Sector: Consumer defensive
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7 of the Best Long-Term Stocks to Buy and Hold originally appeared on usnews.com
Update 04/15/24: This story was previously published at an earlier date and has been updated with new information.
