7 Timeless Stocks to Invest in for 2024


  • Chevron Corporation (CVX): A strong oil asset base with an attractive break-even that ensures robust cash flows.
  • Costco Wholesale (COST): Ample scope for expansion in new markets and recurring (subscription) revenue will continue to swell.
  • Apple (AAPL): Focused on investing in the generative AI sector that’s likely to create value in the coming years.
  • Keep reading for timeless stocks to buy ideas!
timeless stocks - 7 Timeless Stocks to Invest in for 2024

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The buy-and-hold strategy serves as the biggest source of wealth creation in the markets. However, it requires research and high conviction to hold through the good and bad times. I have experienced the feeling of selling core portfolio stocks on a 15% to 20% market correction. Selling has invariably been a bad decision while holding has created wealth. The focus of this column is on timeless stocks that are buy-and-forget.

It’s worth noting that we live in a dynamic world from the perspective of technological advancements. While screening timeless stocks, it’s important to consider names that are investing in innovation. This might not be entirely true for sectors like energy or industrial commodities. However, in these sectors, I would look for companies that are ahead of the curve by investing in global decarbonization efforts.

Overall, the idea is to look for fundamentally strong stories with an innovation edge. In my view, the timeless stocks discussed will continue to beat index returns through the decade.

Chevron Corporation (CVX)

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In the energy sector, Chevron Corporation (NYSE:CVX) is a quality name for sustained value creation. Even with economic headwinds, CVX stock has remained sideways in the last 12 months. Further, the stock offers an attractive dividend yield of 4.28%. Once global GDP growth accelerates on the back of possible rate cuts, I expect the stock to surge higher.

It’s worth noting that Chevron’s business is a cash flow machine. The Company’s oil assets have a low break-even. For 2023, Chevron reported operating cash flow of $35.6 billion. If oil trades above $80 per barrel, the annual OCF is likely to be more than $40 billion. This provides ample flexibility for capital investments, dividends, and share repurchases.

Besides investing aggressively in exploration, Chevron is also focused on green energy investment. This includes hydrogen, other renewable fuels, and carbon capture. It’s worth noting that the Company currently produces one million tons per year of hydrogen. Chevron also holds 75 patents related to hydrogen energy. This will support expansion and future development in this area.

Costco Wholesale (COST)

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The value creation potential of Costco (NASDAQ:COST) is underscored by the fact that in the last ten years, COST stock has delivered capital gains of 640%. I would look at accumulating the stock on corrections. Besides healthy capital gains, COST stock offers a dividend yield of 0.55% and I am bullish on healthy dividend growth in the coming years.

An important point to note is that the consumption sector is the backbone of U.S. economic growth. With retail spending being an important part of overall consumption spending, Costco is likely to continue witnessing growth. At the same time, the Company is pursuing international expansion. Markets like China can provide strong revenue growth support in the coming years.

It’s worth noting that Costco has 870 warehouses globally. However, 747 warehouses are in the United States, Canada, and Mexico. There is ample scope for warehouse expansion I emerging markets like China where the Company has only five warehouses. Another positive to note is that Costco reported membership fee of $4.7 billion for the last twelve months. As member households swell, recurring revenue will boost cash flows.

Apple (AAPL)

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When talking about innovators in the technology sector, Apple’s (NASDAQ:AAPL) name has always been at the forefront. With innovation and a strong brand-pull, AAPL stock has created massive wealth for investors. In the last ten years, the capital gains from the stock have been 864%.

I expect value creation to be sustained in the form of capital and dividend gains. It’s worth noting that AAPL stock currently trades at a forward price-earnings ratio of 27.8. Valuations are attractive and I expect a healthy rally from current levels. This makes it one of those timeless stocks to buy.

Recent news indicates that Apple has canceled its electric vehicle project. With intense competition, the decision seems to be appropriate. At the same time, Apple is likely to focus resources and investments towards the fast-growing generative AI sector. Any potential news of investment in this area can spark a meaningful rally for the stock.

I must mention here that Apple spent $30 billion on research and development last year. Bringing AI features to its devices might just be a small part of the plan to benefit from AI growth.

Lockheed Martin (LMT)

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Global defense spending has been increasing on a sustained basis and touched record highs of $2.2 trillion for 2022. With heightened geopolitical tensions, it’s likely that defense spending will continue to increase.

It’s therefore important to hold a quality defense stock in the portfolio. Lockheed Martin (NYSE:LMT) looks attractive at a forward price-earnings ratio of 16.6. Further, the stock offers a dividend yield of 2.93% and I believe that healthy dividend growth is likely throughout the decade.

It’s worth noting that as of Q4 2023, Lockheed Martin reported a record order backlog of $160.6 billion. Order intake has been robust and I expect the backlog to swell further. This provides clear revenue and cash flow visibility. For the current year, Lockheed expects free cash flow in the range of $6 to $6.3 billion. All in all, it’s one of those timeless stocks.

Lockheed Martin also continues to invest in next-generation defense technology. The areas of research include hypersonic solutions, next-generation interceptors, directed energy, among others. Innovation is likely to ensure that the Company grows at a steady pace.

Newmont Corporation (NEM)

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Newmont Corporation (NYSE:NEM) might not have created value in the last five years. I however believe that the next five years will be characterized by healthy capital and dividend gains. The investment-grade gold miner looks attractive at a forward price-earnings ratio of 15.6 and offers a dividend yield of 3.35%.

It’s worth noting that gold is trading above $2,000 an ounce. With the possibility of expansionary policies, I am bullish on the precious metal surging higher. Factors like geopolitical tensions and inflation will also support gold on the upside.

As gold trends higher, Newmont is likely to create value. The Company has a strong asset base with 128 million ounces of gold reserves and another 155 million ounces in resources. Further, the Company has 40Mt in copper reserves and resources.

I must mention here that Newmont reported adjusted EBITDA of $4.2 billion last year. If gold surges from current levels, there is a strong case for operating cash flows of more than $5 billion. This will provide flexibility for healthy dividend growth and aggressive capital investments.

Merck (MRK)

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An interesting point to note is that Merck (NYSE:MRK) stock has trended higher by just 65% in the last five years. However, the stock is up by 18% in the last six months. In my view, the biopharmaceutical sector is undervalued and MRK stock is an attractive bet. My view is underscored by the point that MRK stock trades at a forward price-earnings ratio of 15 and offers a dividend yield of 2.39%.

One reason to like Merck is its deep pipeline of new molecular entities. Currently, more than 80 programs are in the second phase of clinical trials with 30 programs in phase three. As new drugs are launched in the next few years, growth is likely to be steady along with cash flow upside.

For 2023, Merck reported sales of $60.1 billion. The Company has guided for revenue in the range of $62.7 billion to $64.2 billion for the current year. Merck has also guided for capital investment of $18 billion through 2027 for manufacturing capacity expansion. This is in anticipation of an expanding product portfolio.

Tesla (TSLA)

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Tesla (NASDAQ:TSLA) stock has been lower amidst volatility in the recent past. However, investors should not forget that TSLA stock has surged by 1,100% in the last ten years. The investment has been a massive value creator. I further believe that Tesla will continue to create value over the next decade primarily due to two factors. This makes it one of those timeless stocks.

First, Tesla has always focused on innovation and that’s one factor that will keep the Company competitive. Further, the EV industry is still at an early growth stage. There is ample headroom for penetration globally. Tesla is among the companies that are likely to benefit.

Besides an attractive product line-up, I am bullish on Tesla’s low-cost cars. Last year, Elon Musk indicated that the Company’s next-generation vehicle platform will cut production cost to half. If this is achieved, Tesla is likely to see strong growth in deliveries in markets like India, and Indonesia, among others. Overall, I would not be surprised if TSLA stock surges by another 7x to 10x by the end of the decade.

On the date of publication, Faisal Humayun did not hold (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.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

Article printed from InvestorPlace Media, https://investorplace.com/2024/03/7-timeless-stocks-to-invest-in-for-2024/.

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