The stock market in 2022 has been volatile, and stocks are now officially in a bear market — which could be good news for long-term investors. Finding the best long-term stocks is about digging through stable companies with solid financial and business performance over time.
These stocks may be volatile, as a broader stock market selloff will probably send them lower as well. It is impossible to entirely predict the actual bottom for any stock price. But picking companies with momentum in earnings and revenue that are trading at cheap valuations makes stock investing a long-term success.
It takes a lot of patience and determination to find the best long-term stocks, but statistics show it is one of the wisest moves. Short-term investing is not suitable for everyone, as the wild price swings can not only make you nervous but also force you to make trades that will harm your portfolio.
With all that said, here are some of the best long-term stocks that should perform well over the coming years.
|ARLP||Alliance Resource Partners||$21.10|
Vista Energy (VIST)
Vista Energy (NYSE:VIST) explores and produces oil and gas in Latin America, mainly in Argentina “with its main assets in Vaca Muerta, the largest shale oil and shale gas play under development outside North America.”
The stock is up nearly 17% in 2022, despite the broader stock market selloff. The company has turned profitable in 2021, reporting net income growth of 146.5% to $1.03 billion.
The price/book ratio of 0.68X is very attractive, as it is combined with lots of growth.
The expected revenue growth of 54.6%, and operating cash flow growth of 68.92% are very bullish. The firm has a gross profit margin of 71.72% and has generated positive free cash flow of $72 million in 2021, while it trades at a trailing P/E ratio of 12.5. It is a cheap stock for patient long-term investors.
Obsidian Energy (OBE)
Obsidian Energy (NYSEAMERICAN:OBE) is an oil and gas producer with a portfolio of assets with daily production around 25,000 barrels of oil equivalent. It is a stock that has shined so far in 2022 with gains of 85% year-to-date. The reason is soaring energy and oil prices.
Despite the rally in 2022, the stock is trading at a P/E ratio of 1.8 and has a one-year target estimate of $12.30 or an upside potential of 61%.
Sales gained a lot of momentum in 2021 with an increase of 64.55% and the firm is generating positive free cash flow as of 2020.
The expected revenue growth of 41.56% and free cash flow per share growth rate of 147.87% is not only very positive but could signal the initiation of a dividend policy soon.
Exxon Mobil (XOM)
Exxon Mobil (NYSE:XOM) is a leading energy provider and chemical manufacturer with four brands in its portfolio — Esso, Exxon, Mobil, and ExxonMobil — that market fuels, lubricants and chemicals.
XOM stock is up nearly 43% in 2022, due mostly to high oil prices. Exxon Mobil, except for 2020 is a very profitable company. It also pays a forward dividend yield of 4.2%. The bullish thesis remains throughout 2022 if oil prices trade at elevated prices. This will give continued profitability to the firm. And the enormous free cash flow growth of 1,479.23% in 2021 to $36.05 billion could prompt the firm to reward its shareholders with special cash dividends.
It would be a big bonus to receive extra cash in a year when stocks are under intense selling pressure.
The one-year estimate target of $102.90 or an upside potential of 17% is another reason to grab some shares of Exxon Mobil and keep them for the long-term.
Harte Hanks (HHS)
Harte Hanks (NASDAQ:HHS) provides marketing services worldwide. It provides data analytics, creative service, CRM and digital solutions among other services and demand generation.
The stock has soared nearly 70% in 2022 and still trades at a trailing P/E ratio of 4.85.
The company returned to profitability in 2021, with net income growth of 874.09% to $13.11 million.
This is a momentum play, as the stock has a three-month return of nearly 55% and with an expected EBITDA growth of 89.11%, so this rally could continue. The stock is very cheap despite its strong rally year-to-date.
The price/sales ratio of 0.4X, and the forward EV/sales ratio of 0.55X are solid reasons to invest now and be patient.
The analysts give a one-year target estimate of $20, giving it an upside potential of 70%.
Alliance Resource Partners (ARLP)
Alliance Resource Partners (NASDAQ:ARLP) is the second-largest coal producer in the eastern U.S. This natural resource company generated revenue not only from coal production but also from oil and gas.
This company has solid profits and generates consistent positive free cash flow. The business is doing very well, as proven by the net income growth in 2021 of 234.21%.
There is plenty of top-line growth too, as its expected revenue growth of 22.35% and EBIT growth of 104.09% maintain a highly bullish thesis.
It gets even better, as the stock has a forward dividend yield of 6.8%. Waiting to see if it hits its one-year target estimate of $24, a potential gain of 14%, while getting a nice dividend yield is not a bad idea at all.
Valhi (NYSE:VHI) is a holding company that has a chemicals segment marketing titanium dioxide pigments; a component products segment that manufactures security products for uses such as healthcare applications and toll storage; and a real estate management and development segment.
The stock is up nearly 65% in 2022. Why is this so? The company is a money-making machine with excellent profitability. In 2021 the company made a net income of $127.2 million, an increase of 149.9%. It is also a free cash flow machine, generating tons of positive free cash flow.
The trailing price/sales of 0.55 is too low, making it a very cheap stock that is also supported by a PEG GAAP of 0.03.
KT Corporation (KT)
KT Corporation (NYSE:KT) provides telecom services not just in Korea but also internationally. I was not aware of this stock until recently, but it is a very interesting one to monitor for the long term. Here is why.
It is not just the gains of about 12% in 2022. The sales growth is very stable, with only small fluctuations and this revenue has made higher profits over time.
When a company increases revenue and at the same time generates more net income growth, it is doing something exceptionally well. In 2021 net income grew 106.2% and revenue grew 4.1%.
This telecom firm knows how to generate value for its shareholders as it has increased its free cash generation significantly in the past five years. In 2021 it generated free cash flow growth of 35.12%.
The stock has a forward price/sales ratio of 0.47X and a trailing PEG GAAP of 0.05.
Lots of profits and a great valuation are two key reasons to buy KT stock now.
On the date of publication, Stavros Georgiadis, CFA 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.