Buying and holding stocks for the long run is a time-tested strategy that can generate sizable long-term returns. Investors can simplify the experience by purchasing shares of top-tier ETFs with low expense ratios, but also by picking up stocks to buy now that can lead to market outperformance.
It’s also possible to pick stocks that align with your financial goals instead of relying on a fund. For instance, a growth investor can allocate more of their capital toward companies that are delivering higher revenue and net income growth. Investors who are approaching retirement can adjust their portfolios and focus on corporations that give out good dividends. These are some of the long-term stocks to buy now that you may want to consider.
Deckers Outdoor (DECK)
One of the top stocks to buy now is Deckers Outdoor (NYSE:DECK), which has been gaining market share in the athletic apparel industry. The company’s Ugg and Hoka products continue to attract new customers and have translated into impressive financial growth.
The firm reported 16% year-over-year revenue growth and 44% year-over-year diluted EPS growth in Q3 FY24. The Q3 FY24 profit margin rose to 25.0%. Deckers Outdoor stock is in the middle of a correction shortly after being added to the S&P 500 index. A further decline will make the stock more enticing, but it only trades at a 30 P/E ratio. That’s not the worst valuation due to the company’s rising profit margins and long-term growth opportunities.
Even with the recent correction, Deckers Outdoor is still outperforming the stock market. Shares have gained 23% year-to-date and are up by 433% over the past five years. Analysts are bullish on the stock and have rated it as a “Moderate Buy.” The average price target implies a 15% upside from current levels.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) offers a reasonable valuation, compelling growth prospects, and an advertising duopoly. It’s no secret that the company makes most of its revenue from ad placements on Google and YouTube. However, the formula has been working for decades.
The company reported 13% year-over-year revenue growth in Q3 2023. Advertising growth is rebounding after a dismal 2022. Google Cloud was another highlight as this segment now represents more than 10% of the company’s total revenue. Google Cloud can help the company’s revenue growth rates and profit margins in future quarters.
Despite the hoopla about ChatGPT potentially replacing Google, analysts are rightfully optimistic about Alphabet stock. The stock is rated as a “Strong Buy” and has a projected 7% upside. The highest price target of $185 per share suggests that the stock can gain an additional 19%.
Alphabet has outperformed the stock market with a 13% year-to-date gain and a 148% gain over the past five years. It’s another one of the top stocks to buy now.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is another one of the top stocks to buy now that is worthy of investors’ attention. The corporation has expanded into numerous industries and is doing its best to build a monopoly in artificial intelligence. Microsoft has been the front runner from the start with its Open AI investment, Copilot launch, and more recently, a $1.5 billion investment in Emirati AI.
The company is determined to extend its lead in the artificial intelligence race and leave its competitors in the dust. Investors have noticed and continue to accumulate shares despite a $3 trillion market cap. The stock is up by 11% year-to-date and has gained 218% over the past five years.
The stock trades at a 37 P/E ratio and has a 0.73% dividend yield. Microsoft has had an annualized dividend growth rate of 10.86% over the past decade. The company has hiked its dividend for 19 consecutive years and has an impressive 25.15% dividend payout ratio.
Analysts are optimistic about the stock and believe it can rally by an additional 16% based on the average price target. It is currently rated as a “Strong Buy.”
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG) isn’t going to outperform growth stocks during bullish markets. This mature blue-chip stock offers more stability than most corporations. PG stock has a 0.42 beta which makes it less susceptible to dramatic price swings.
The firm is durable and has been in business for more than 100 years. Procter & Gamble recently increased its quarterly dividend to $1.0065 per share. That’s a 7% increase from last year’s $0.9407 quarterly dividend payout. The recent dividend increase marks the company’s 68th consecutive year of raising the dividend. It’s also the company’s 134th consecutive year of distributing dividends to shareholders.
Most people will continue to buy from Procter & Gamble during economic downturns. The company operates many consumer goods brands that have analysts feeling encouraged about prospects. Procter & Gamble stock is currently rated as a “Moderate Buy” with a projected 9% upside based on the average price target. The highest price target of $180 per share implies a 15% gain from current levels.
Lululemon (LULU)
Lululemon (NASDAQ:LULU) offers an enticing buy-the-dip opportunity. The stock nosedived after releasing its earnings report for Q4 2023. Revenue increased by 16% year-over-year while diluted earnings per share surged from $0.94 to $5.29 year-over-year.
While those numbers look good on the surface, investors had some concerns. Revenue in the Americas only increased by 9% year-over-year. International sales came in 54% higher compared to the same period last year. However, a slowdown in domestic sales and guidance that only suggests 9%-10% year-over-year revenue growth in Q1 2024 spooked investors. Full-year revenue growth is expected to range from 11%-12%.
Lululemon is still taking market share from established brands that have lower growth rates. However, investors now get to buy shares with a 28 price-to-earnings ratio. The valuation is more attractive given the company’s growth opportunities. Shares are down by more than 30% year-to-date and present a long-term buying opportunity. The average price target suggests a 42% upside from current levels.
American Express (AXP)
American Express (NYSE:AXP) is set to grow in most economic cycles. People will continue to use their debit and credit cards during economic downturns. The company makes money for every transaction and has delivered sizable gains for long-term investors.
The stock has gained 85% over the past five years and is up by 16% year-to-date. The stock only has a 19.50 P/E ratio and offers a 1.28% dividend yield. American Express has done a great job of raising its dividend over the years and has an annualized 10.43% growth rate over the past decade. A 21.26% payout ratio suggests the corporation has plenty of mileage to support further dividend hikes.
American Express once again demonstrated the strength of the consumer. Revenue increased by 11% year-over-year in Q4 2023 while net income jumped by 23% year-over-year. The company expects to achieve full-year 2024 revenue growth that ranges from 9% to 11%. Leadership believes that the company can achieve 10% revenue growth and mid-teens EPS growth for multiple years.
iShares Gold Trust (IAU)
Investors may want to give the iShares Gold Trust (NYSEARCA:IAU) a closer look as economic uncertainty grows. This fund tracks the price of gold which goes up in economic climates with rising inflation and lower interest rates.
The Federal Reserve seems likely to keep rates up for higher than expected which isn’t good for gold. However, the Fed also doesn’t seem likely to raise rates any higher. Meanwhile, inflation is making a comeback and came in hotter than expected in March.
IAU was flat to start the year but has been barreling higher since the start of March. The fund is now up by 16% year-to-date which is higher than the S&P 500 or the Nasdaq 100. The iShares Gold Trust has even outperformed the S&P 500 over the past five years. It has an 83% gain during that stretch compared to the S&P 500’s 71% gain. As inflation and economic uncertainty pick up, IAU can rally amid the chaos.
On this date of publication, Marc Guberti held long positions in DECK, GOOG, and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.