Top stocks are the best for long-term growth

Top stocks are the best for long-term growth
  • McDonald’s Corp. (ticker: MCD)

America’s most famous fast food chain is an excellent long-term consumer defensive holding. With over 36,000 corporate and franchise restaurants in operation worldwide, McDonald’s has achieved an extremely strong competitive position and network effect, giving it great longevity and resilience even in the worst economic conditions. With excellent revenue, operating margins and free cash flow, McDonald’s manages to continually deliver shareholder value and consistent returns. The company recently posted diluted earnings per share growth of 18.9%, pointing to its ability to still grow and adapt in the modern fast food industry. The company shows an ability to innovate, with its increasing adoption of automation, new technology and globally diversified menu offerings. With a current dividend yield of 2.2% and a five-year beta – a measure of correlation with the broader market – of 0.61, McDonald’s is an excellent low-volatility blue-chip stock that can anchor your investment portfolio for decades.

  • Walmart Inc. (WMT)

Walmart is the undisputed king of American retail. Its size, low prices and broad offerings give it a strong competitive advantage. Thanks to its ever-expanding presence, Walmart has been able to maintain its margins and continually reinvest profits into its business. Walmart operates 11,700 retail stores in 28 countries, with a growing e-commerce presence and stakes in other online retailers. As a consumer defensive stock, Walmart is a great buy during recessions, as its business model allows it to almost always have customers lined up. With a five-year beta of 0.55, Walmart is an excellent low-volatility long-term stock. Walmart also pays a dividend yield of 1.5%. The five-year growth of that dividend has been strong at 10%.

  • Johnson & Johnson (JNJ)

Walk into any drugstore, and you’ll instantly spot a variety of health care products on the shelves from Johnson & Johnson. As one of America’s largest diversified health care products providers, Johnson & Johnson has been a mainstay in the economy, with its consumer health, pharmaceuticals and medical device products leading the way in sales. Popular consumer health product brands include Band-Aid, Listerine mouthwash, Visine eyedrops, Aveeno lotion, Neutrogena face wash, Neosporin ointment, Benadryl allergy medication and Sudafed congestion medicine. In the medical devices segment, Johnson & Johnson sells catheters, hip and knee replacements, blood glucose monitoring equipment, and surgical tools. The essential nature of its products allows Johnson & Johnson to maintain excellent fundamentals, with impressive net profit margins of 22.3%. The stock pays a healthy dividend yield of 2.3% with a sustainable payout ratio of 53.1%.

  • Verizon Communications Inc. (VZ)

One of America’s most oligopolistic industries – defined by dominance by a small number of companies – is the telecommunications sector, and its undisputed king is Verizon Communications. With an iron grip on wireless, wireline and broadband communication services, Verizon has enjoyed a strong economic moat for decades. With expansions into hardware sales of smartphones and computers, as well as networking for businesses such as cloud services and cybersecurity, Verizon has further solidified its competitive advantage. The company trades at an attractive valuation, with a low price-earnings ratio of about 10. What’s most attractive about Verizon for investors is its high dividend yield, which sits at 4.8% with a sustainable payout ratio of 47.4%. Couple this with excellent fundamentals like a 29% return on equity, and you have what is indeed an excellent long-term buy-and-hold stock.

  • Coca-Cola Co. (KO)

As one of America’s most popular beverage companies, Coca-Cola offers more than 4,100 drinks across 500 well-known brands such as Coca-Cola, Diet Coke, Coca-Cola Zero, Sprite, Fanta, Minute Maid and Powerade. Its brand power isn’t limited to just America, though. With sales in Europe, the Middle East, Latin America, Asia Pacific and Africa, Coca-Cola is a globally recognized brand beloved by consumers of all cultures. This was achieved by its network of 250 bottling companies, 900 productive plants and 27 million retail outlets. As a mainstay in Warren Buffett’s portfolio for decades, Coca-Cola has excellent fundamentals, and the stock also pays a respectable dividend of 2.8%.

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