Wall Street has been on a wild ride since the novel coronavirus pandemic began in early 2020. However, that also means there have been –and currently are — plenty of opportunities for stocks to buy.
Overall, investors seeking a port in the current storm of market volatility should look to stable and profitable companies. This includes firms that have a long and distinguished track record of providing healthy investor returns.
Thus, in this article, we’re going to look at four excellent companies that are well-run by competent management teams. In turn, they make for stocks to buy that investors can hold in their portfolios for the long-term. They are:
- Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B)
- Bank of America (NYSE:BAC)
- Costco (NASDAQ:COST)
- Microsoft (NASDAQ:MSFT)
Now, let’s dive in and take a closer look at each one.
Stocks to Buy For The Long-Term: Berkshire Hathaway (BRK.B)
Berkshire Hathaway is the ultimate “set it and forget it” stock. Captained by arguably the most successful investor in history, Warren Buffett, Berkshire Hathaway is an extremely well-run and diversified holding company. Its holdings include everything from the GEICO insurance company to Fruit of the Loom underwear and the Dairy Queen chain of restaurants.
Additionally, Berkshire Hathaway also holds a lot of stock in a diversified and successful portfolio. The company is one of the largest shareholders of both Apple (NASDAQ:APPL) and Coca-Cola (NYSE:KO) to name only a couple of Berkshire’s stock holdings. And Warren Buffett has a legendary track record of investments returns. Between 2008 to 2018, the company saw cumulative growth of 119.7%, compared to 73.2% growth for the S&P 500.
Overall, Berkshire Hathaway is a cash cow. The company currently has $146 billion in cash on hand. Investors can sleep soundly with Berkshire Hathaway shares in their portfolio. However, I would recommend that investors purchase the class B stock of Berkshire Hathaway, which trade at around $250 per share. The class A stock, which trades at more than $383,500 per share, is out of reach for most investors.
Bank of America (BAC)
Bank of America is a stock that can carry investors through good times and bad. As the second-largest bank in the U.S., Bank of America isn’t flashy or exciting. It also isn’t expensive at $36.60 a share.
However, what BAC stock offers is rock solid earnings and dependable growth. And with the coronavirus pandemic retreating and the economy reopening, Bank of America should perform strongly on both the consumer and business lending sides of its business.
Since the financial crisis of 2008-09, Bank of America has recovered to become a top-notch financial institution. And now, Bank of America is well-capitalized , pays a decent 2% dividend yield and buys back its own stock whenever possible.
Plus, the bank has grown its deposit and loan portfolios faster than competing financial institutions. In fact, Bank of America is so well-managed that it is now a major holding in Berkshire Hathaway’s portfolio.
Stocks to Buy For The Long-Term: Costco (COST)
Grocery retailer Costco’s stock hasn’t been the same since the company issued a special dividend payment of $10 per share last December. Since then, COST stock has been trading sideways — sliding 15% over the past three months.
This is unfortunate, but it is unlikely that the hugely profitable company will be down for long. While analysts fret that Costco’s bull run will end with the pandemic, the reality is that the company was doing gang buster business before the coronavirus had people stockpiling their pantries.
That said, sales at Costco remain robust. The company’s monthly results for January of this year were strong with comparable sales up 15.7%. Additionally, e-commerce sales are exploding, having risen 86.4% year-over-year in the first quarter of 2021. On top of those strong earnings, Costco’s annual memberships in its warehouse club provide the company with a steady and predictable source of income that is the envy of competing retailers. Especially with an annual membership renewal rate of greater than 90%.
With all of that in mind, Costco is definitely a long-term holding that investors can depend on. So, buy the dip in COST stock!
If there’s such thing as a blue chip technology stock, it’s Microsoft. The Seattle, Washington-based company is a dependable and well-known technology company that is stable and extremely profitable. Key to the company’s long-term success has been its ability to diversify and enter new markets, from cloud computing to gaming. And while there have been a few strikeouts over the years (anyone remember the Zune media player?), more often than not Microsoft has hit home runs as it has this past year with its Teams platform that enables people to work remotely from home.
Moreover, MSFT stock has climbed 66% higher since March of last year at the pandemic’s peak, and gained more than 338% in the past five years. The stock is currently trading right around $228 per share. That said, greater share appreciation can be expected provided Microsoft continues delivering on business lines that include software, cloud computing and video games. In fact, many analysts predict Microsoft will be the next company to reach a $2 trillion market capitalization.
On the date of publication, Joel Baglole held long positions in BRK.B, APPL and MSFT.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.