Right now, you may be preparing for more than the holidays. You might also be looking at your portfolio with the idea of getting it ready for the new year. It's impossible to predict which stocks will rise or fall or what direction the entire market will take, of course -- but there is one thing we can do to prepare for any situation. And that's add some high-quality stocks with solid track records and bright long-term prospects to our portfolios.
These players should serve you well over time, making them excellent choices for long-term investors -- and no-brainer buys before the new year. Let's check out five top stocks that could boost your portfolio next year and over the long run.
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1. Amazon
Amazon (AMZN 3.43%) is a winner in two high-growth markets: e-commerce and cloud computing. The company's leadership in those areas is set to last thanks to its investments and innovation. For example, in e-commerce, it's worked to make delivery faster and more efficient and to add benefits to its Prime subscription services. In cloud computing, it's invested in the hot growth area of artificial intelligence (AI) to serve clients eager to add AI to their latest projects.
The market giant also has a solid track record of growth, and after a recent tough spell due to the weak economic environment, Amazon showed it could manage difficult times too. In fact, Amazon chose this time to improve its cost structure -- and the efforts are bearing fruit. In the most recent quarter, the company reported gains across various financial metrics, from net sales to free cash flow.
Considering these elements, today, at 54 times forward earnings estimates, big-time growth stock Amazon looks cheap compared to its forward PE ratio of around 90 at the close of 2021.
2. Coca-Cola
One reason to love Coca-Cola (KO) is its long track record of dividend growth. The world's largest non-alcoholic beverage maker is a Dividend King, meaning it's lifted its dividend for more than 50 consecutive years. Why is that important? Because it shows rewarding shareholders is central to Coca-Cola's strategy and it's likely to continue along this path.
Coca-Cola's $10 billion in free cash flow also shows it has what it takes to maintain passive income growth for its shareholders.
Though Coca-Cola's earnings may not increase in leaps and bounds like those of a younger and smaller company, you can count on slower -- but generally sure -- earnings growth over time. And Coca-Cola's brand strength has helped it to deliver these gains, even in challenging economic environments. In the most recent quarter, the beverage maker reported rising revenue and earnings per share -- and lifted full-year revenue guidance.
Today, Coca-Cola shares trade for 21 times forward earnings estimates, a bargain for all of these strengths you'll appreciate year after year.
3. Home Depot
Home Depot (HD 0.94%) isn't offering investors the same tremendous growth it did during the earlier days of the pandemic -- when consumers spent a lot of time at home and focused on home improvement projects there. Today, the company faces the headwinds of a tough housing market and higher interest rates. And that's weighed on growth.
But it's important to remember Home Depot increased revenue by $46 billion over the past three years, and the company has a long track record of earnings growth. So, today's slowdown is merely a pause -- and not a reason to flee shares of this market giant.
Home Depot generates sales from do-it-yourself customers as well as professionals, and the pros represent a significant growth opportunity over time -- with an addressable market of about $475 billion. And Home Depot has invested in gaining that market share through efforts such as creating a customized online platform and a special sales force.
Like Coca-Cola, Home Depot trades for a bargain basement 21 times forward earnings estimates.
4. Chewy
Pet parents like Chewy (CHWY 2.99%) -- and so should you, thanks to this young growth company's earnings progress so far. Last year, the e-commerce site for pet products reached profitability and has increased sales throughout this year.
Chewy also saw a double-digit increase in active customer spend in the most recent quarter -- and in spite of a difficult economic environment, Chewy's active customers only declined about 1%. And here's some good news for the long term: Chewy has expanded into Canada, a country it says has the market share and profit potential of the U.S. In more good news, Chewy could do this without a significant initial investment due to the strength of its existing platform. This could represent a huge catalyst for share performance down the road.
Chewy shares haven't reflected the company's progress so far or these extremely bright prospects; they've dropped about 48% this year, but don't let that scare you away. Instead, consider this a buying opportunity for an e-commerce company with significant long-term potential.
5. Apple
Apple's (AAPL -0.35%) brand strength makes it a stock you probably won't ever want to sell. The company's far from being a new kid on the block, yet its products continue to be favorites around the world -- and ones fans can't resist buying. This offers Apple pricing power, meaning it can easily lift prices without losing out on sales.
The technology and consumer goods giant can also count on another source of revenue -- and this one may just be getting started. I'm talking about services revenue. Apple offers a variety of them, from digital content to payment services, which generate recurring revenue for the company. In fact, thanks to more than 1 billion paid subscribers, Apple's services revenue reached a record in the most recent quarter.
You might expect to pay a fortune for such a stock, but Apple shares trade for only about 29 times forward earnings estimates right now. And this truly makes the market giant a no-brainer buy to add to your year-end shopping list.
