Set it and forget it. There are many stocks that young investors should buy and hold for the long-term without the need to trade them through buy and sell orders. Some stocks are so valuable and provide such consistent returns that all investors have to do to profit from them is hold them in their portfolios.
This is especially true for young investors who have long-term time horizons for their investments. Recent graduates from college, and even high school, should look to buy and hold the following stocks for the long haul without the need to sell any shares.
In this article, we examine seven of the best stocks for upcoming graduates to buy and hold forever:
- Apple (NASDAQ:AAPL)
- General Motors (NYSE:GM)
- Home Depot (NYSE:HD)
- Coca-Cola (NYSE:KO)
- Walt Disney (NYSE:DIS)
- Amazon (NASDAQ:AMZN)
- Mastercard (NYSE:MA)
Buy And Hold Stocks: Apple (AAPL)
CNBC host and commentator Jim Cramer likes to say that investors should “own Apple, don’t trade it.” This is sound advice. A $100 investment made in Apple on the day of its initial public offering (IPO) on December 12, 1980 would today be worth more than $70,000. One single share of Apple bought on the day of its IPO would be worth more than $15,000 today. Anyway you slice and dice it, Apple is a great long-term investment and one people should buy and hold forever.
Apple today is a diversified conglomerate and the largest publicly traded company in the world. The iPhone maker was the first company to have a market capitalization of more than $2 trillion. When APPL stock moves, the whole market gyrates. And the company continues to find innovative ways to infiltrate our lives.
Today, Apple is involved in everything from streaming and online payments to artificial intelligence and persistent rumors related to the development of self-driving cars. And this is on top of the company’s bread and butter MacBook computers and iPads.
General Motors (GM)
Detroit automaker General Motors continues to be one of the leading examples of American industry, both at home and around the world. For more than 100 years, GM has remained at the forefront of the global automotive industry. And while there have been many bumps along the way (the current semiconductor shortage being the latest hiccup), GM today is in a sweet spot as the company moves aggressively into electric and autonomous vehicles and away from the internal combustion engine on which the entire car industry was built.
Current Chief Executive Officer Mary Barra gets much of the credit for pushing GM into innovative new areas, and for pushing the company’s share price higher. Last November, GM announced that it will spend $27 billion on all-electric and autonomous vehicles through 2025, and that the automaker will release 30 new electric vehicles globally by 2025, including more than 20 in North America. Besides electric and self-driving cars, GM is also entering the urban air mobility sector, where it see a $1 trillion market opportunity.
Year-to-date, GM stock is up 45% to its current price of $60 a share.
Buy And Hold Stocks: Home Depot (HD)
Home Depot is the type of stock that can carry investors through good times and bad. The leading home improvement retailer in the U.S., Home Depot today boasts $140 billion in annual sales across nearly 2,300 store locations. A cyclical stock that tends to move in tandem with the economy (the housing market in particular), Home Depot has delivered steady and reliable profits to shareholders since it made its stock market debut on September 22, 1981.
Healthy dividend payments and strong share price appreciation have benefitted investors over the years. In the past decade (since 2011), HD stock has grown 778%, more than triple the cumulative gain of 213% for the S&P 500 stock index during the same 10 year stretch. Dividends, since 2011, have risen to $1.65 a share per quarter from just 25 cents. Strong returns such as that make Home Depot a buy and hold forever stock.
Since March 4th of this year, HD stock has climbed 24% and now sits at $318.74 a share. Home Depot has been both a strong stay-at-home and reopening stock.
Coca-Cola is as American as apple pie and baseball. The Atlanta, Georgia-based company that has been making soft drinks since 1892 and today has a market capitalization of $237 billion. Not fancy, cutting edge or exciting, KO stock nevertheless has a track record of delivering steady and reliable returns to investors. The main benefit of the stock comes from its high dividend yield of 3.05%, which is among the best of American blue-chip companies.
This past February, Coca-Cola announced its 59th consecutive annual dividend increase. In 2021, Coca-Cola will pay 42 cents per share, per quarter in dividend payments. That’s up from 18 cents at the beginning of 2007 before the global financial crisis and nearly double the 22 cents per share the company paid in dividends each quarter back in 2011. In fact, Coca-Cola has managed to increase its dividends going back to the early 1960s up through to the current pandemic. Now that’s a stock worth holding onto.
KO stock has risen 13% since January of this year and currently trades at $55.06 a share.
Buy And Hold Stocks: Walt Disney (DIS)
Walt Disney has been a leading American entertainment company since its first animated short film, which ran just eight minutes and was called “Steamboat Willie,” debuted in 1928. Today, Disney is so diversified that the company was able to smoothly weather the Covid-19 pandemic. While the company’s theme parks and cruise lines were shutdown, its Disney+ streaming service and ESPN sports television channel performed gangbusters.
Like all securities, DIS stock has highs and lows. And while the Mouse House’s share price has been lower in recent weeks, off 14% from its 52-week high of $203.02, the correction comes after a stellar run up. Over the past 12 months, Disney’s share price has risen 47% and now stands at $177.67. Over the past decade (since 2011), the share price has grown 324%. Investors should be attracted to Disney’s diversification and the popular brands it owns, ranging from Marvel and Star Wars to National Geographic and Pixar.
Disney today is the world’s second largest entertainment company.
Amazon’s $9 billion acquisition of MGM Studios is the latest example of how the online retailer is taking over the world. The Seattle, Washington-based company that began life as a small company that only sold books online, today is coming out of the global pandemic generating more than $100 billion of sales each and every quarter. Amazon is now involved in everything from groceries to aerial drones.
The MGM Studios acquisition is aimed at beefing up the company’s Prime Video streaming service with properties ranging from the James Bond film franchise to reality television shows such as “Survivor” and “The Voice.” It’s the company’s biggest acquisition since Amazon jumped into groceries back in 2017 with its $13.7 billion purchase of Whole Foods.
AMZN stock has been a perennial winner for shareholders, up 34% over the past year at $3,249.14 a share. In the past 10 years, the share price has risen a staggering 1,552%.
Buy And Hold Stocks: Mastercard (MA)
Mastercard has been a leading credit card company for 55 years and been a great investment the entire time. Today, Mastercard is an international financial services company with operations in every corner of the world. The Harrison, New York-based company processes $6.3 trillion worth of transactions each year and has a market capitalization $362 billion. At the end of 2020, there were 2.8 billion Mastercard credit cards in circulation worldwide. Along with Visa (NYSE:V), Mastercard remains the largest financial payments company in the world.
MA stock can be cyclical in nature, meaning that its performance closely tracks the performance of the economy. But over the long-term, Mastercard’s share price has proven to be a winner. Since last October, Mastercard stock has increased 25% to $365.74 a share. Mastercard did not go public until 2006. Since its IPO, the share price has risen over 8,000% and underwent a 10-for-1 stock split in 2014. Investors who bought $10,000 worth of Mastercard stock on the date of its IPO, and held it, would today have nearly $1 million. Now that’s a good investment!
On the date of publication, Joel Baglole held long positions in APPL and DIS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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.