- The current market downturn provides a viable opportunity to invest in these best long-term stocks for the future.
- American Express (AXP): A new all-digital checking account will likely expand the company’s consumer base.
- Caterpillar (CAT): The recent purchase of an energy-as-a-service provider could improve efficiency, reduce costs, and provide an additional source of revenue.
- Coca-Cola (KO): Management has launched a new division tasked with the creation of limited-edition flavors.
- General Motors (GM): The acquisition of a workplace collaboration technology company will lead to more revenue.
- HP (HPQ): Warren Buffett recently disclosed a major investment in the tech name.
Long-term investment stocks, our topic for today, have not been immune to current bear market conditions. This dip in share prices, however, provides the perfect opportunity to own these robust institutions for buy-and-hold investors.
It’s no secret that Wall Street is worried about a potential recession. As a result, the NASDAQ 100 index has fallen around 24% year-to-date (YTD), while the S&P 500 index has dropped 15.4%.
Yet, research by Capital Group suggests, “The S&P 500 Index has typically dipped at least 10% about once a year, and 20% or more about every six years, according to data from 1950 to 2019… [E]very S&P 500 decline of 15% or more, from 1929 through 2019, has been followed by a recovery. The average return in the first year after each of these declines was 54%.”
Despite recent losses, well-established corporations have a long history of bouncing back after downturns. History tells us these companies are likely to do so once again.
With that information, here are five of the best long-term stocks to include long-term portfolios:
Best Long-Term Stocks: American Express (AXP)
First on our list of long-term stocks is American Express (NYSE:AXP), the leading provider of payment card services. Around 115 million of their credit and charge cards are currently in use around the world.
In late April, the company provided Q1 financials. Consolidated total revenue totaled $11.7 billion, representing a 29% increase year-over-year (YOY). Earnings per share (EPS) came in at $2.73, essentially unchanged from $2.74 the year before.
Recently, the company detailed its first ever checking account, American Express Rewards Checking. This account will provide membership rewards, a high annual percentage yield (APY), and purchase protection similar to American Express credit cards.
AXP stock is down 5.48% for the YTD, but down 0.34% over the past year. Meanwhile, the dividend yield sits at 1.29%. Forward P/E and P/S numbers are 16x and 2.67x, respectively. Lastly, the 12-month median forecast stands at $200.
Next up on today’s list is Caterpillar (NYSE:CAT). It the world’s largest manufacturer of construction and mining equipment as well as industrial diesel and natural gas engines.
In late April, Caterpillar announced Q1 results. Revenue increased 14% YOY to $13.6 billion. Adjusted profit per share was $2.88, up slightly from $2.87 the year previous year. Operating cash flow was $300 million.
Management recently announced the successful acquisition of Tangent Energy Solutions, an energy-as-a-service company. Tangent, which will continue operations under Caterpillar’s Electric Power division, should help increase efficiency as well as customer base.
CAT stock is down 0.59% YTD and 13.02% over the past year. The current price supports a dividend yield of 2.08%. Shares are trading at 16.78 times forward earnings and 2.16 times trailing sales. And the 12-month median forecast stands at $240.00.
Best Long-Term Stocks: Coca-Cola (KO)
The third long-term stock for today is the beverage giant Coca-Cola (NYSE:KO). It oversees more than 200 brands carrying thousands of products. The company also boasts more than 1.9 billion servings of various Coca-Cola beverages daily.
In late April, management released the Q1 report. Revenue grew 16% YOY to $10.5 billion. EPS was 64 cents, an increase of 23% from the previous year. Cash flow from operations was $620 million.
Recently, the company announced Coca-Cola Creations, a platform for the development of a series of limited-edition flavors and designs. Wall Street noted that the most recent design, Zero-Sugar Byte, is geared towards gamers and the metaverse, reflecting a desire to participate in consumer trends.
KO stock has returned 1.32% since January. Shares are trading at 24.69 times forward earnings and 6.63 times trailing sales. Meanwhile, the dividend yield is 2.88%. Finally, the 12-month median forecast stands at $70.00.
General Motors (GM)
The fourth long-term stock on today’s list is General Motors (NYSE:GM). the largest automobile manufacturer stateside. It owns and operates four distinct brands: Chevrolet, Buick, GMC, and Cadillac.
In late April, GM released Q1 metrics. Revenue was $35.98 billion, up from $32.47 billion the year before. Adjusted EPS was $2.09, down from $2.25 the previous year.
InvestorPlace.com readers will remember that by 2035, General Motors plans to to manufacture only electric vehicles. Management recently announced a new partnership with Red Hat, part of International Business Machines (NYSE:IBM). This collaboration should accelerate the design and production of Unifi, the operating system for GM’s growing line of all-electric vehicles.
However, despite strong sales growth, GM stock has lost about a third of its value this year. Shares are trading now at 5.43 times forward earnings and 0.43 times sales. Finally, the 12-month median forecast stands at $58.50.
Best Long-Term Stocks: HP (HPQ)
The final stock on today’s list is HP (NYSE:HPQ), one of the world’s largest manufacturers of personal computers, printers and printing supplies, and 3D printers. The group retains the largest market share in the printer business.
In mid-February, HP released Q1 financials. Net revenue came in at $17 billion, representing an 8.8% increase YOY. Adjusted EPS was $1.10, increasing 20% from 92 cents the year before. The Americas segment contributes 40% of the revenues, followed the EMEA (35%) and Asia-Pacific (25%).
In late March, the company announced plans to purchase Poly (NYSE:POLY), a workplace collaboration name. Wall Street regards the move as a step by HP to diversify its offerings as well as to embrace the new hybrid-work paradigm.
HPQ stock is down 4.43% for the YTD, but up 11% over the past year. Forward P/E and P/S numbers are 8.4x and 0.66x, respectively. Dividend yield is currently 271%. Finally, the 12-month median forecast stands at $36.00.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.