Investing is a long-term pursuit. The best way to accumulate excellent returns is to buy great businesses and hold their stocks over many years. Using this approach, even relatively small initial purchases, say $50,000, can translate into substantial portions of a retirement fund in the long run. Long-term patience is a key component of most successful wealth-building strategies, after all.
With that positive prospect in mind, let's look at a few attractive stocks that appear to have excellent fundamentals as long-term holds. Read on for some good reasons to buy Apple (AAPL 2.67%), Palo Alto Networks (PANW 0.52%), and Shopify (SHOP 1.10%) stocks right now.
1. Apple
Apple needs no introduction as a tech stock, given that its brand dominates high-end consumer tech niches from smartphones to tablets to wearables. Yet what many investors often miss about this business is its incredible financial strength. Apple's stock has the largest market cap on the market for good reason -- nobody can match Cupertino's incredible cash-generating prowess.
Consider that Apple's operating cash flow in the most recent quarter was $29 billion, giving CEO Tim Cook and his team ample funds they could direct toward growth initiatives and toward the growing dividend. Profit margin clocks in at nearly 30% of sales .
The company's profitability should expand over time, too, as its business tilts more toward services such as its music, fitness, and payments processing platforms. With a high likelihood of steady sales growth, rising profits, and expanding cash returns, an Apple investment can be a positive influence in any long-term-focused portfolio.
2. Palo Alto Networks
There should be room in every portfolio for more concentrated exposure to an attractive growth niche. Consider Palo Alto Networks to fill that space for you. The software-as-a-service company is entrenched in two attractive areas, cybersecurity and artificial intelligence (AI), that are likely to see fantastic gains over the next few decades. And its most recent earnings updates show that it can compete well in a crowded industry that includes deep-pocketed heavyweights like Microsoft.
Palo Alto Networks only recently established steady profitability, and so investors don't yet have a clear idea where its annual earnings power will land. But the company has a good shot at translating its market share gains into strong profits over the years, with a good chance of boosting shareholder returns along the way.
3. Shopify
Shopify stock has trounced the market so far in 2023, but investors shouldn't let those gains scare them away from this growth stock. The e-commerce platform specialist has a good hold on a growing industry, as it accounts for roughly 10% of digital sales in the U.S. market. That share is likely to expand over time even as the company pushes deeper into in-person retailing through services such as its point-of-sale platform.
Wall Street is excited about Shopify's potential to boost profitability now that sales growth is accelerating, and the company has exited the costly logistics business. Look for positive signs in these areas when Shopify announces Q2 results in early August. Taken together, rising sales growth plus wider margins should add up to stronger bottom-line profits.
But the bigger returns will come to investors who hold the stock well beyond just one or two quarters. In the next decade, Shopify is aiming to widen its service portfolio, allowing it to charge more to buyers who find value in bundling those services into one big contract. Looking back in a few years, investors will probably be glad they held this stock while that profitable process played itself out.
