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10 Stocks to Buy and Hold for Decades

Author: Jeremy Bowman | October 20, 2021

Person using key at safety deposit box.

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Stocks you can set and forget

Almost every investor wants to own stocks that they can hold for decades. Not only do these kinds of blue chip companies tend to outperform the market, but holding for the long term is also a much easier way to invest than short-term trading or trying to time the market. Investors like Warren Buffett have shown the advantages of long-term investing, which also offers benefits like acting as a tax shelter while your investment grows and an avoidance of commission fees on trading.

If you’re looking for the kind of stocks you can set and forget, take a look at the 10 stocks on the following list.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

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Warren Buffett smiling.

Source: The Motley Fool

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1. Berkshire Hathaway

Warren Buffett is one of the biggest advocates of long-term investing, so it makes sense to start with Berkshire Hathway (NYSE: BRK-A) (NYSE: BRK-B), the conglomerate he founded and has run for more than 50 years.

Berkshire has been one of the best-performing stocks on the market during his time primarily because of Buffett’s investing acumen, but the way he’s structured the company also sets it up for long-term success. Berkshire owns Geico and other insurance businesses, allowing it to collect insurance premiums that can then be deployed to make investments, which Buffett refers to as the float. He’s also bought and invested in businesses with sustainable competitive advantages, which should serve the company well after he’s no longer in charge. Finally, Berkshire’s diversification offers a degree of exposure to multiple industries that is rare in a single stock.

ALSO READ: Have $1,000? 2 All-Weather Dividend Stocks to Buy and Hold Forever

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Basketball players on an indoor court.

Source: Nike

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2. Nike

Brands are one of the best sources of sustainable competitive advantage, and in the sportswear industry, there’s no brand more powerful than Nike (NYSE: NKE). It ranks 15th on Interbrand’s list of the world’s most valuable brands, and it’s been the leader in the industry for more than a generation, riding Michael Jordan’s star power in basketball, a segment it’s dominated since. In addition to Jordan, Nike’s roster of celebrities is unrivaled as it currently counts the likes of Serena Williams, Cristiano Ronaldo, LeBron James, and other global icons.

Nike is also rapidly building out its direct-to-consumer business with apps like SNKRS and Nike Training Club, along with its own stores, strengthening its connections with customers. That should ensure the company remains the leader in sneakers and sports apparel for the next generation.

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A Costco store as seen from the parking lot.

Source: Costco

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3. Costco Wholesale

Most investors seem to think brick-and-mortar retail is dead, but Costco Wholesale (NASDAQ: COST) is one of the few traditional retail concepts that continues to warrant a high valuation from investors. Costco’s unique membership-based warehouse model is difficult to disrupt through e-commerce, and its deep discounts on quality merchandise continue to draw customers in. The company’s customer retention is around 90%, showing a high level of satisfaction, and it is opening new stores while also investing in e-commerce capabilities. Costco even has a track record of rewarding investors every few years with special dividends, giving you another reason to hold the stock for the long term.

While the retail industry will continue to evolve, Costco should remain among the winners thanks to its bargain prices, customer satisfaction, and unique, membership-based business model.

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A Facebook like symbol outside of Facebook headquarters.

Source: Facebook

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4. Facebook

You might be surprised to find Facebook (NASDAQ: FB) on this list. After all, the company seems to be constantly surrounded by controversy, and investors were reminded of that again when whistleblower Frances Haugen testified before Congress, saying that the company puts profits ahead of people.

As the leading social media company, Facebook may never escape that sort of controversy, but the business itself is one of the most profitable in the world, and its core, digital advertising, isn’t going to change.

Because of antitrust threats and other critiques, Facebook stock seems to trade at a discount, valued at a price-to-earnings ratio of 25. That favors the stock’s growth over the long term, as do its investments in the metaverse as CEO Mark Zuckerberg believes virtual reality will be the next major computing platform.

ALSO READ: 2 Beaten-Down Tech Stocks to Buy and Hold for the Long Term

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A Starbucks barista arranging rows of carryout orders.

Source: Starbucks

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5. Starbucks

Coffee has been a beverage staple for hundreds of years, and Starbucks (NASDAQ: SBUX) has built an empire out of the world’s love of coffee.

The company has more than 30,000 cafes around the world, including a fast-growing market in China, and a thriving business licensing its brand and selling consumable products like bagged coffee and ready-to-drink beverages in grocery stores and convenience stores.

Demand for coffee isn’t going away, and Starbucks' brand and reach give it a competitive advantage through its loyalty program, which has more than 20 million members, and easy payments and pickups through its Mobile Order & Pay program. Those factors explain why Starbucks is the clear leader in coffee with no close No. 2.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Previous

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Employee working in store using Square payments system.

Source: Square

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6. Square

There are number of fintech stocks that will be winners in digital payments, but arguably no one has stakes in more opportunities than Square (NASDAQ: SQ). The company began life as a piece of hardware to allow small businesses to accept payments with a smartphone, and it now provides a wide range of services for small businesses, including payment processing and capital lending. It also offers peer-to-peer payments through the Cash App, as well as investing in stocks and cryptocurrency.

That combination of businesses, a disruptive approach to finance, and a high-margin business model should make the company a winner over the coming decades.

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Person shopping in warehouse store with cart.

Source: Getty Images

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7. Procter & Gamble

Procter & Gamble (NYSE: PG) is about as close to the textbook definition of a buy-and-hold stock that you’ll find. The company has been around for nearly 200 years; has raised its dividend annually for more than 50 years, making it a Dividend King; and has an unmatched array of popular household products under its umbrella.

Among its top brands are Tide, Crest, Gillette, and Pampers, and those are products consumers buy in good times and bad, making the company a recession-proof stock. Additionally, categories like diapers and laundry detergent are unlikely to be disrupted.

With a far-reaching distribution network and significant marketing muscle, Procter & Gamble should be able to remain on top of the household products industry for the foreseeable future.

ALSO READ: Got $1,000? Here's 1 Great Stock to Buy and Hold

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Disney theme park Magic Kingdom.

Source: Disney

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8. Walt Disney

It’s hard to think of a company with a lineup of intellectual property that could match Walt Disney (NYSE: DIS). In addition to the classic Disney characters and princesses, it owns Marvel, Pixar, and Star Wars, and grabbed franchises including The Simpsons with its acquisition of Fox’s entertainment assets. It’s been the first name in family entertainment for nearly a century, and there are no signs of that changing thanks to those franchises and a flywheel business model that monetizes them several times through movies, theme park attractions, and consumer products like toys.

Not long ago, Disney seemed to be struggling with the streaming transition, but that’s changed as Disney+ has more than 100 million subscribers around the world, making it the foremost challenger to Netflix. The popular streaming service should help power the company over the next generation.

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Healthcare workers stand and smile.

Source: Getty Images

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9. Johnson & Johnson

The demand for healthcare isn’t going away. In fact, it will only continue to grow as baby boomers age and healthcare sucks up more discretionary and excess income. That’s good news for the industry as a whole, and one winner is sure to be Johnson & Johnson (NYSE: JNJ). If you’re looking for a buy-and-hold healthcare stock, it’s hard to beat Johnson & Johnson. The company has a diversified business model, operating in three segments: medical devices, pharmaceuticals, and consumer products like Tylenol. Johnson & Johnson is also a Dividend Aristocrat, and is one of only two companies with AAA credit rating from the S&P. (Microsoft is the other one.) That shows that the company is virtually bulletproof and should continue to grow steadily over the years ahead.

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Person holds phone showing dating app.

Source: Getty Images

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10. Match Group

Online dating is here to stay, and Match Group (NASDAQ: MTCH) has emerged as the leader in the industry. The company owns Tinder and dozens of other dating apps, including OkCupid and Plenty of Fish, and has put up steady growth over its history, building out subscription businesses to complement its free user base.

The company continues to make acquisitions, like Hinge, that it can roll into its marketing engine and complement its portfolio of brands.

As dating apps continue to take share from more traditional methods of finding relationships, Match Group should continue to be a winner, and its two-sided marketplace is a proven way of delivering high margins.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Previous

Next

Person using binoculars to look out at landscape.

Source: Getty Images

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Look for sustainable competitive advantages

The easiest way to find long-term stocks to buy and hold is to look for companies with sustainable competitive advantages, or economic moats as Warren Buffett likes to call them. In general, these are companies that have a history of beating the market, and have a strong brand or a similar source of competitive advantage like network effects or switching costs.

If you can find these kinds of stocks, it’s worth holding on to them, as over a long period of time they can deliver massive returns and beat the market by a wide margin in the process.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jeremy Bowman owns shares of Facebook, Netflix, Nike, Square, Starbucks, and Walt Disney. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Costco Wholesale, Facebook, Microsoft, Netflix, Nike, Square, Starbucks, and Walt Disney. The Motley Fool recommends Johnson & Johnson and Match Group and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short October 2021 $120 calls on Starbucks. The Motley Fool has a disclosure policy.

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