Stock Market
Top Companies for Long-term Investment in 2023
It is important to look for companies where you can hold your stock. If you’re planning to go for a long-term investment, choosing which stock to hold on to for a long time is necessary. Making sure that the quality of your stock has compounded adds more to its quantities and will build up better returns or profits in the future.
Selling your stocks impulsively due to fear or simply your psychological stock market might affect your portfolio and prevent you from gaining better profits from your investment. That is why making sure that the stocks you invested in will reap you greater earnings in the future will assure you that you will earn.
Here are some options you can consider to save time from looking for companies that will guarantee you earnings after holding your stock for a long time.
Company # 1: Microsoft
Microsoft has steadily increased its sales as one of the world’s largest companies, and its emphasis on frequently occurring, or subscription-based, income sources is especially appealing for dividend investors.
The company has a strong balance sheet, with much more cash than liabilities and a meager dividend payout, which allows for significant dividend increases.
Given its 12-year streak of dividend increases, Microsoft could become a Dividend Aristocrat. Its low yield of 1.1% isn’t exciting, and 2022 has been a challenging year for the stock, but it has an excellent long-term track record of outperforming the market in total returns.
Company # 2: Johnson & Johnson
Johnson & Johnson already has a portfolio of outstanding brands that produce products that people need in their daily necessities, particularly healthcare items. Johnson & Johnson has vast and consistently profitable operations in pharmaceuticals and medical devices, in addition to its well-known consumer brands; this pairing has enabled the company to boost its dividend for 60 years.
This scope of healthcare brands, pharmaceuticals, and medical equipment is unparalleled and has proven to be a massive profit generator. However, management believes that this “conglomerate” structure has confined the corporation’s ability to focus resources and has announced plans to separate the consumer goods business into a different business in late 2021. The split is scheduled for 2023, with current shareholders gaining shares in both companies.
Company # 3: American Express
Financial services, like consumer and business lending, are another source of top dividend stocks, with American Express being one of the finest. American Express has a long history of increasing or retaining its dividend in all economic environments.
This is due to its high-quality lending practices and focuses on higher-income customers that are less likely to default on their debt payments during difficult economic times. This makes it both a secure long-term investment and a credible source of dividends, and an option to purchase during bear markets when its stock may fall despite the company’s strong performance.
Company # 4: Mastercard Inc
Mastercard Inc is one of the stocks that Warren Buffets has suggested if you opt for a long-term investment. While most consumers resumed spending by the summer, the manner in which they used their credit cards had changed for obvious reasons.
People have replaced travel purchases with online shopping and food delivery since they switched to contactless payments—one of the Covid-era changes we believe will last. Customers spent more on debit cards and less on credit cards, with Visa and Mastercard earning more for each transaction.
They also profit more from cross-border transactions, which are primarily the result of international travel, which ceased early in the pandemic. Earnings per share at Visa and Mastercard fell by 7% and 16%, respectively, as opposed to their normal pre-growth. However, the company is still not worried since people are starting to adjust to the new normal; the number is catching up with Mastercard’s stock return of 20.2% compared to Visa’s 17.1%
Company # 5: Amazon.com
This year, Amazon.com made headlines by conducting a 20-for-1 share buyback. However, the excitement surrounding that news has gradually disappeared as the stock price has plummeted. AMZN stock is trading roughly 40% below its all-time highs, having lost most of its COVID-era gains. The shares are slightly greater than four years ago, during the summer of 2018.
Yet here’s the thing: Amazon has had its ups and downs. During the late 2018 bear market, the shares fell by over 30%, and they lost a quarter of their worth or more in 2011, 2014, and 2016. And then there was 2008 when the stock lost nearly two-thirds of its value. Every time AMZN experienced a setback, it recovered stronger.
Naturally, Amazon is a larger, more profitable organization than it was compared to what it was used to. It also deals with standard rough patches for a company of its size, such as mass protests and political interference.
Company # 6: Target
Target unintentionally has become the leading example for everything ailing the economy throughout 2022. When consumers diverted more of their purchases on travel, experiences, and new office attire, the company’s inventory, which began the year generally evaluated to home goods, electronics, and other goods prominent amidst the pandemic, suddenly made things a lot less sense.
Target’s costs increase when its low- and middle-income customers are tight on cash and unable to absorb cost increases on their own. Despite this, Target’s management is not bothered since its dividend has raised to 20% earlier this year.
The shares may be cheap, but the trading can be 17 times its earnings and seems like a safe bet to invest in since it has survived challenges such as deflation, inflation, and everything in between.
Company # 7: Alphabet
Not everyone may not knows this, but Alphabet is Google’s parent. Just like Amazon, they also conducted a 20-for-1 stock split, and the company has struggled after that. However, Alphabet’s stocks aren’t “cheap” as they invest at 4.8 times sales. However, this is a significant decrease from a price-to-sales (P/S) ratio during the 8s in the past year or so.
Regarding price-to-earnings (P/E), GOOGL trades at a not-quite outrageous 18 times trailing profits. Alphabet is the only stock that can justify such a high multiple. Despite its massive size, the company enjoyed 13% quarterly growth in revenue and a nearly 30% return on equity (RoE) last quarter.
Company # 8: Paypal
We all had a terrible time since the virus outbreak in 2020, and a lot has started to change, especially in terms of payment to avoid physical contact. Although the financial industry is vulnerable to transition, the cryptocurrency discussion has gotten out of hand. While Paypal may still need to be ready for the big leagues, it is now one of the most well-established players in this developing new ecosystem.
Given its popularity due to its worldwide access, Paypal is commonly used even in our country. It has become essential to all freelancers who want to transact with customers abroad and has been very helpful in managing one’s finances. PayPal’s stock is now significantly down to 70% from its recent peak and trades at 4.1 times sales. That’s the lowest they’ve ever been in PayPal’s history as a public financial company. If it still doesn’t interest you, even if it’s already 70%, you’re clearly letting go of a huge opportunity.
Company # 9: Realty Income
Investment trusts in real estate investors are typically concerned with dividend yield, and with bond rates as low as they have become in past years, countless shareholders have begun to see REITs as a viable alternative to bonds. Realty Income is as close to a bond as you can possibly get while also being a stock. Realty Income has a competitive 4.8% dividend yield.
However, unlike bond cash flows, which never change, it increases its dividend annually. Realty Income tends to raise its dividend four times a year! The REIT has increased its dividend for such an outstanding 100 quarters in a row. Realty Income will not make you wealthy. However, you still generate a continuous safe dividend income.
Company # 10: Walt Disney
This may be a questionable suggestion, but I assure you it’s worth considering. Despite the abuse it has experienced this past few years, because of the growing competition in the online streaming space, Disney+’s growth story appears less compelling. Rising prices and workforce shortages have also exacerbated the situation. All of these factors have contributed to the stock has loss of more than half its value since its peak in 2021. However, we shouldn’t underestimate Mickey Mouse.
After all, Disney is the most recognizable brand in family travel and entertainment, and it owns all of the most valuable media companies in history, including the Marvel Cinematic Universe and Star Wars. And, following the stock price decline, Disney trades at levels last seen in 2014 and has a forward P/E ratio of only 18. Throughout the years, as a public company, the business has endured and prospered across numerous downturns.
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A multi-award-winning blogger and advocate for OFWs and investment literacy; recipient of the Mass Media Advocacy Award, Philippine Expat Blog Award, and Most Outstanding Balikbayan Award. Her first book, The Global Filipino Bloggers OFW Edition, was launched at the Philippine Embassy in Kuwait. A certified Registered Financial Planner of the Philippines specializing in the Stock Market. A recognized author of the National Book Development Board of the Philippines. Co-founder of Teachers Specialist Organization in Kuwait (TSOK) and Filipino Bloggers in Kuwait (FBK). An international member of writing and poetry. Published more than 10 books. Read more: About DiaryNiGracia
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