HomeInvestmentWhat are the Best Stocks to Buy for Long-Term Growth?

What are the Best Stocks to Buy for Long-Term Growth?

Investing in stocks with strong long-term growth potential is a common strategy used by many investors to build wealth over time. The key is identifying companies that are poised for sustainable, profitable growth for many years to come.

But with thousands of stocks to choose from, which ones are worth investing in today for substantial gains in the future? Here we discuss what to look for in long-term growth stocks and some of the best options to consider adding to your portfolio.

What to Look for in Long-Term Growth Stocks

It’s challenging to predict which stocks will outperform 10 or 20 years down the line. Still, some characteristics help identify companies with attractive long-term growth prospects:

 

Industry Leadership – Companies that dominate their industries can maintain leadership as the market evolves. Industry leaders often have valuable competitive advantages, like network effects, patents, or brand reputation, that allow them to expand and continue innovating.

 

Solid Fundamentals – Stocks with strong balance sheets, consistent revenue growth, expanding profit margins and healthy cash flow signals have strength to weather downturns and keep growing over decades.

 

Large Addressable Market – The larger the potential market for a company’s products or services, the more room it has to increase sales over long periods. Unique, innovative products that create new markets have especially high growth potential.

 

Competitive Advantages – A strong brand, proprietary technology or exclusive access to resources makes a company hard to replicate. Businesses wielding these competitive edges can outpace rivals and continue leading as their market evolves.

 

Strong Management Team – Executive leadership plays a pivotal role in directing a company’s long-term strategy. Savvy executives who can adapt to change make excellent stewards of enduring growth stocks.

With these criteria in mind, which specific stocks appear well-positioned for many years of steady growth? Here are seven of the best long-term picks to consider.

7 of the Best Long-Term Growth Stocks

 

Company Industry Key Advantages Growth Outlook
Apple Consumer Tech Iconic brand, ecosystem lock-in, R&D talents 5G iPhones, A.I. integration
Nvidia Semiconductors AI leadership, proprietary platforms Graphics chips, self-driving cars
Visa Payments Network effects, high switching costs Expanding mobile/digital payments
Costco Discount Retail Subscription model, efficient operations International expansion
Intuitive Surgical Medical Devices Pioneering robotic surgery system Aging population procedures demand
Palo Alto Networks Cybersecurity Top advanced threat protection Double-digit growth amid rising threats
ServiceNow Enterprise Software Leading digital workflows platform Automating enterprise functions

Below we analyze why each of these stocks represents a smart long-term investment:

Apple

 

Apple is the world’s largest information technology company by revenue and one of the most cash-rich companies on earth. The iPhone maker has built a powerful services ecosystem encompassing music, video, gaming, financial services and more – keeping customers closely locked in. With iconic branding, deep integration between products and future innovations like augmented reality (AR) glasses potentially strengthening its competitive position, Apple appears well-positioned for steady expansion for years to come as technologies like 5G and artificial intelligence proliferate.

Nvidia

Nvidia is the global leader in visual computing chips and artificial intelligence (AI) technology powering video games, data centers, automobiles, supercomputers and beyond. Its partnerships across major industries – from gaming to cloud computing to robotics – give Nvidia diverse revenue streams to tap into long-term secular growth trends around AI, graphics and autonomous machines. Superior semiconductor designs protected by intellectual property represent key barriers to entry that should help Nvidia expand its reach considerably in the future.

Visa

Visa operates the world’s largest payments network, connecting consumers, merchants, banks and governments across more than 200 countries. Its asset-light business model generates strong cash flow without assuming credit risk. Network effects from its vast customer base lead to higher transaction volumes that create further incentives to keep using Visa services – resulting in robust revenue growth and profit margins. As global digital payments expand in volume, Visa has a long runway to keep growing steadily for years to come.

Costco

 

Costco’s membership warehouse model creates loyal customers incentivized to renew subscriptions and purchase more goods to maximize value. Its formidable buying power extracts bargain wholesale pricing while best-in-class inventory management minimizes costs across distribution. Costco has significant room to grow by adding locations, expanding internationally and boosting profits on existing members. Consistent low-cost pricing strategies should help Costco keep attracting member renewals and solid sales numbers to fuel long-term growth.

Intuitive Surgical

Intuitive Surgical manufactures cutting-edge robotic surgical systems used for minimally invasive procedures. As a pioneer in robotic surgery with thousands of patents protecting proprietary technology, Intuitive Surgical stands well-positioned to keep benefiting from demand growth for less invasive operations. Especially as population demographics shift towards older age groups requiring more prostate, colorectal and gynecological surgeries, Intuitive Surgical’s ‘razors and blades’ business model should allow it to expand sales across large underpenetrated procedure segments.

Palo Alto Networks

Palo Alto Networks provides industry-leading cybersecurity products for government agencies and enterprise customers to prevent data breaches and threats. Its integrated platform offers best-in-class capabilities harnessing cloud-delivered machine learning to automate cyberattack prevention, detection and response. With digital transformation intensifying corporate needs for advanced IT security while cyberattacks grow more frequent and severe, Palo Alto Networks sits poised to sustain double-digit top-line expansion for years as customers flock to its superior threat intelligence and prevention safeguards.

ServiceNow

 

ServiceNow provides cloud-based workflow automation software helping enterprise clients digitize business processes and tasks. Its Now Platform centralizes technical services, customer service, human resources and other workflow functions through user-friendly interfaces. ServiceNow’s solutions scale easily across organizations worldwide – giving it a large addressable market still in early phases of transitioning legacy workflows onto ServiceNow’s superior systems. Its wide economic moats from customer stickiness and platform integrations helps ServiceNow keep growing at speed while generating high recurring SaaS revenue.

Long-Term Growth Stocks FAQ

What timeline defines a long-term growth stock?

 

Long-term growth stocks typically refer to stocks investors believe can sustain steady growth for 5-10 years or more. Companies with durable competitive advantages in expanding industries have potential for reliably growing revenues, earnings and share prices over extended time frames spanning many years or decades.

How much risk comes with long-term growth stocks?

 

Like all stocks, long-term growth stocks carry risks of economic downturns, market volatility, new competition and other uncertainties that can disrupt growth trajectories. However, stocks capable of long-duration growth often have financial strength and multiple expansion drivers that allow them to better navigate challenges. Leading innovation and huge addressable markets also buffer top growth stocks from short-term external volatility.

 

What industries tend to produce the most long-term growth stocks?

 

Technology (software, hardware, semiconductors, internet) and consumer discretionary (ecommerce, media, retail) are sectors rich with disruptive innovation primed for long-term growth. Stocks riding transformative secular trends in digital payments, cloud computing, online services, artificial intelligence, healthcare tech and more often sustain robust growth for 10-20 years or longer.

 

Should long-term growth stocks pay dividends?

 

Great long-term growth stocks do not necessarily need to pay dividends – and many top innovators do not. Companies with abundant growth opportunities often create more shareholder value reinvesting profits into R&D, acquisitions, expansion and other productive initiatives. However, income investors can find some exception long-term growth stocks offering modest dividends.

 

What future innovations might create new long-term growth stocks?

 

Emerging technologies like electric vehicles, autonomous ridesharing, commercial space travel, robotics, 3D printing, quantum computing and biotech could produce tomorrow’s biggest growth stocks. The companies best leveraging these futuristic innovations into transformational new products, services and business applications stand primed for possible decades of expansion ahead.

 

Investors searching for enduring growth opportunities should keep these future trends on the radar when evaluating long-term growth prospects.

Stocks Poised for Long-Duration Growth

Finding stocks capable of steady gains for 10 or 20 years is never easy, but extremely rewarding. Top long-term growth stocks combine industry leadership in their domain with visionary management, wide moats from competition and vast addressable markets ripe for disruption.

 

Apple, Nvidia, Visa, Costco, Intuitive Surgical, Palo Alto Networks and ServiceNow represent companies wielding these enduring competitive advantages. Their pioneering and dominant positions in expanding markets provide healthy runways for prolonging growth trajectories for years ahead – making each a compelling pick for long-term investment success.

 

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