When considering the best stocks for the next decade of investing, it’s important to remember one thing: no one has a crystal ball. While past performance can help characterize a company up until its present-day trading price, nothing or no one can perfectly predict what a company’s future performance will be.
Moreover, it’s not just the financials that make up a company. Public perception, legal battles and the overall market impact can rapidly sway the investor hive mind from one direction to the next.
To avoid the unfortunate pitfalls of day trading, swing trading and the herculean task of timing the market, I always recommend looking around you and finding the companies you believe in. Once you’re comfortable with a company’s mission, products, leadership and overall footprint, then buy its stock and hold on until you absolutely cannot anymore.
More often than not, if you invest in a company with the right fundamentals and mission for the coming decades, you won’t suffer as much as following the hype train and fear of missing out.
Toyota Motors (TM)
I talk about Toyota Motors (NYSE:TM) often as one of the best stocks to buy, and it’s not just because I drive a two-decade-old RAV4. As far as the automotive industry goes, I believe electric vehicles are not the future of a net-zero world.
Not to mention the severe ecological damage that comes from lithium mining or the voracious appetite the world will have for it if we go all in on EVs. Rather, like many things, the truth lies somewhere in the middle, which for vehicles is the hybrid engine.
Therein lies my faith in Toyota, since it dominates the design, manufacturing and sale of hybrid engines across the world. In 2023, Toyota sold about 3.4 million hybrid vehicles, an eye-watering increase of 2.6 million from 2022.
Thus, Toyota is among the best stocks for the next decade of the automotive industry.
Analog Devices (ADI)
Oppenheimer’s equity research team recently upgraded Analog Devices’ (NASDAQ:ADI) price target from $215.00 to $245.00, now giving it an “outperform” rating. This would represent a 14% upside on top of the 19.9% increase the stock has seen in the last six months.
That’s an impressive performance for a stock that doesn’t get that much attention, but it’s for good reason. ADI, despite its diversification, derives much of its intrinsic value from its deeply embedded products in the defense industry.
That’s why ADI is a standout for the next decade, and while financials have contracted in the last few quarters, the company has a long runway to take off from. With its $1 billion investment in its factory in Beaverton, Oregon, ADI’s expansion of domestic production could support a dominant position in a future with strained international semiconductor manufacturing.
As a result, investors should keep a close eye on ADI in the next decade while it currently commands a strong buy rating.
Costco Wholesale (COST)
Up 61% in the last year, Costco Wholesale’s (NASDAQ:COST) efforts to diversify its store offerings are paying off handsomely. There’s one specific type of Costco Warehouse, however, that I believe could be the catapult for Costco’s stock price in the next decade — the Costco Business Center.
These gargantuan warehouses dwarf the standard footprint of a regular Costco warehouse and specialize in even larger quantities of items targeted toward business owners. Essentials like office supplies, soaps, furniture and snacks are offered in bulk quantities that help significantly lower the price per unit.
Yet, it’s not just business owners who are allowed to shop at these locations, rather, any Costco member can. Furthermore, the Costco Business Center also offers some bulk food items, like whole lambs, or 50 bags of chips in a package which could prove lucrative should regular members be gravitating towards better unit savings.
With 24 current locations across 12 states, Costco Business Centers could open a new venture to accelerate Costco Wholesale’s success.
On the date of publication, Viktor Zarev 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.
