Investing is about building a stable long-term portfolio, not just seeking immediate gains. In a mixed economic climate with rising employment figures, savvy investors seek forever stocks. These market treasures provide substantial long-term gains, ensuring portfolio resilience across market cycles, regardless of economic fluctuations.
Forever stocks are the stalwarts of the investment world. These include robust companies that continue to demonstrate consistent growth and unwavering stability, outperforming their peers. Top forever stocks serve as secure financial anchors for a portfolio, offering a haven amidst speculative market conditions. They counterbalance riskier segments, making them go-to stocks for long-term gains and stability in your investment portfolio.
Here are seven of the best long-term holdings I would put in the “forever” bucket.
Amazon (AMZN)
Among the constellation of tech titans, e-commerce behemoth Amazon (NASDAQ:AMZN) shines bright. Following a period of prudent cost cutting and headcount reduction, the firm’s financials are primed for an uplift. Resilience is evident, given the company’s impressive 9.4% year-over-year revenue increase in both its e-commerce and cloud segments.
The broad shift towards digitization and AI presents a golden opportunity for the firm, especially with its expansive customer data pool. By enhancing search functionalities and expanding its AI toolkit for AWS, the company is well-prepared to ride the digital wave to new highs.
Amazon’s AWS division experienced a strong 16% year-over-year growth despite the projected slowdown in cloud computing. With AWS targeting a $2.5 trillion untapped market, its growth trajectory remains solidly intact.
MGM (MGM)
On the surface, most investors might not consider MGM (NYSE:MGM) as a forever stock. Gambling is seen as a discretionary pastime. However, what may be widely considered to be a more transient customer base has turned into a more stable one. That’s partly due to MGM’s recent moves to tap into online casino betting and sports wagering through BetMGM, capitalizing on the shifting gambling preferences of millions of Americans.
Additionally, as the allure of online betting endures, BetMGM could become incredibly profitable even when economic conditions become stormy. Growth and profitability both remain strong for this gaming giant, outpacing 5-year historical and sector averages.
Las Vegas, MGM’s home turf and a popular vacation spot, consistently attracts visitors with new attractions, enhancing its appeal. Hence, MGM is poised to reap the long-term benefits of continued in-person and online growth in this sector.
ServiceNow (NOW)
ServiceNow (NYSE:NOW) is a major player in cloud computing and digital workflow management software. Notably, the company surpassed expectations this past quarter, raising its 2023 forecast. The firm posted strong 24% year-over-year revenue growth in the latest quarter while also doubling its net income, showcasing potent growth.
The cloud computing market, projected to reach $2.4 trillion by 2030, offers significant untapped potential for top players like ServiceNow. With a vast client base of over 7,700 global enterprises, ServiceNow currently holds 1,682 annual contracts over $1 million apiece, putting this company above 85% of the top Fortune 500 companies.
CEO Bill McDermott continues to underscore ServiceNow’s versatile software, leveraged for cost efficiency and growth. Impressively, this company’s management team is forecasting 23% to 23.5% service revenue growth in 2023. With numbers like those, it’s impossible to say that ServiceNow’s future is anything but bright.
Microsoft (MSFT)
Microsoft’s (NASDAQ:MSFT) ongoing investments in AI, and ties to OpenAI (the brains behind ChatGPT) marks a major step toward the future. Picture Microsoft’s potent software capabilities amplified by AI, improving the speed, intelligence, and intuition of its product set.
Earlier this year, Microsoft took the tech world by storm, investing a massive $10 billion in OpenAI. Having integrated ChatGPT into Bing search, Microsoft aims to enhance its software stack with the transformative capabilities of AI.
Driven by AI-enabled expansion, Microsoft’s potential for growth is as robust as ever, even amidst market saturation. The first quarter of 2023 saw a 16% rise in Intelligent Cloud revenue, with this segment hitting a remarkable $22.1 billion in sales. I expect that number to continue climbing over the next several quarters as Microsoft layers in AI into its massive product base and cloud offering.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE), a global leader in wind and solar energy production, continues to provide very strong performance as far as renewable energy companies are concerned. The company’s clean energy investments drive solid and consistent growth, while its regulated utility business ensures steady earnings and cash flow.
NextEra stands out among renewable energy companies, given its dominant position in key markets. NextEra is a key player in markets such as Florida, with a number of notable solar and wind utilities. NextEra’s appeal grows with increasing data center demand and climate-related heat in Florida, where most utility customers reside.
NextEra operates an A-graded profitability and growth profile, which boasts double-digit growth across key metrics. On top of that, NEE stock offers a mighty attractive dividend, with 27 years of growth in payouts and a 2.5% yield.
AbbVie (ABBV)
AbbVie (NYSE:ABBV) is a renowned pharmaceutical company, offering a generous dividend of $1.48 per share, or a yield of 4.3%. Despite the recent sell-off caused by Humira’s patent expiration and generic competition, savvy investors see an enticing long-term opportunity to capitalize on the stock’s impressive return profile.
Despite patent issues, AbbVie has maintained consistent robust performance due to its pipeline of drugs. The company’s sought-after medications like RINVOQ for rheumatoid arthritis and Lexapro for anxiety-depression provide very consistent cash flows. Moreover, its strategic acquisition of Allergan brought the youth-preserving neurotoxic protein Botox under AbbVie’s wing. Botox has been a remarkably popular cosmetics treatment over the years and will continue to grow in popularity over time.
As AbbVie continues to grow organically and via acquisitions, this is a stock that should continue to reward investors with both capital appreciation and dividend-related upside. The company’s pipeline teems with promising new medications awaiting various approval stages. As these get approved, investors stand to reap the benefits.
Tesla (TSLA)
In the realm of electric vehicles, Tesla (NASDAQ:TSLA) reigns supreme. This is a stock that’s historically provided tremendous long-term upside potential, with this year being no different. At the time of writing, TSLA stock has more than doubled this year, becoming a poster child for formidable growth. The automaker exceeded expectations again in the third quarter, beating estimates, but posting slightly lower margins due to an aggressive pricing strategy.
Currently, Tesla’s pricing strategy seems to be a winning move, driving demand amidst a landscape teeming with rival EV brands. Given its massive success of late, it’s like Tesla has its GPS for success, perpetually a mile ahead of the competition.
A notable turning point for the company occurred when CEO Elon Musk shifted his focus back to the electric car pioneer, away from Twitter. Consequently, we see how Tesla stock is roaring back, adding another layer to its burgeoning growth story.
On the date of publication, Muslim Farooque 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.
