When looking for stocks to buy and hold for the next 20 years, it’s essential to find ones with economic moat. After all, when it comes to picking stocks, they should strong competitive advantages that are in durable sectors. Some of the top stocks to buy and hold, include:
MGM. | $43.83 | |
General Motors | $41.35 | |
ServiceNow | $458.36 | |
Illumina | $196.58 | |
Booking Holdings | $2,348.37 | |
Fortinet | $59.61 | |
PayPal | $80.80 |
Stocks to Buy and Hold: MGM (MGM)
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Given MGM Resorts’ (NYSE:MGM) leverage to both Las Vegas and Internet gambling, it’s hard to find a better stock to buy and hold. For one, Las Vegas is a Mecca forprofessional sports, entertainment, and conferences. Two, the city will continue attracting millions of people every year, which is great news for MGM. Three, MGM has a strong foothold in Internet gambling.Specifically, BetMGM is the leader in the U.S. market when it comes to online casino games and third in the country in sports betting. And in Nov., a gaming website identified BetMGM as the most likely contender to challenge FanDuel, the sector’s leader.
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Also noteworthy is that MGM is well-positioned to obtain casinos in the New York City area, which is soliciting bids for casinos for the first time and in Texas, which is believed to be likely to legalize casinos in the near-to-medium term. The casinos in those areas will, in all probability, be highly lucrative.
Stocks to Buy and Hold: General Motors (GM)
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Next up on this list of stocks to buy and hold is General Motors(NYSE:GM) is well-positioned for both the gasoline-dominated auto market, and the electric vehicle market. With regards to the gasoline-dominated market, General Motorswas the leader in the U.S. in unit sales and generated record average transaction prices last quarter. Moreover, as CEO Mary Barra said, GM’s “Chevrolet and GMC delivered more than 1.1 million full-size pickups, full-size SUVs and mid-size pickups in the U.S. which is about 350,000 units more than our closest competitor.”
With regards to electric vehicles,GM has an impressive nine EVs available in North America. The company’s extremely affordable Bolt EV and EUV, among the most inexpensive EVs available, “were the bestselling mainstream EVs in the second half of the year.” Even better,the company’s Cadillac Lyriq luxury EV, its Hummer EV pickup and and its BrightDrop electric delivery van is running ahead of GM’s ability to supply them.
Stocks to Buy and Hold: ServiceNow (NOW)
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With its high-tech tools that automate IT tasks, ServiceNow’s (NYSE:NOW)top line soared 24% year-over-year, while its net cash provided by operating activities soared 38% year over year, despite high inflation. Also,boding well for the long-term outlook of NOW stock, on Dec. 24, Morgan Stanley named NOW as its top pick in the software sector, explaining that “The nature of the company’s subscription model gives us confidence in the durability of growth.” The bank also indicated that NOW’s focus on large customers makes it a stable, low-risk choice.
Indeed last quarter the firm added a net total of 126 new customers whose annual contract value was $1 million or high, showing the company’s ability to attract many large customers. And the fact that ServiceNow’s subscription renewal rate came in at 98% last quarter shows that almost all of its customers are satisfied with its offerings. Of course, the latter metric bodes very well for the long-term outlook of NOW stock.
Illumina (ILMN)
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Illumina’s (NASDAQ:ILMN) products, which carry out DNA sequencing, enable scientists and healthcare professionals to analyze the composition of DNA,. As a result, they can create or utilize more effective, targeted treatments for patients.
For example, in January 2022, Stanford Medicine utilized DNA sequencing ” to diagnose rare genetic diseases in an average of eight hours.” And an article about its achievement noted that DNA “sequencing is vital for diagnosing patients with diseases rooted in their DNA: Once doctors know the specific genetic mutation, they can tailor treatments accordingly.” Moreover, DNA sequencing is a vital component of personalized medicine, which is becoming more and more prevalent.
Illumina has a huge 80% share of the global sequencing market, making it basically the Google of sequencing. Although it does have competitors, it appears to be staying ahead of them, unveiling a new , lower-cost line of sequencers last year.
And in conjunction with its most recent earnings report, ILMN stated that the orders for its new sequencers were four times higher than during the last time it launched new ones.
Booking.com (BKNG)
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According to BusinessofApps, Booking.com (NASDAQ:BKNG) is “the largest online travel agency by booking volume and revenue, responsible for 25 percent of all hotel bookings worldwide.” I think it’s a safe bet that both travel and the internet are going to remain extremely popular for the next 20 years. That being said, Booking remains very well-positioned to continue to be the leader of the online travel agency sector during that time.
With hundreds of millions of more citizens in China, India, and many other developing countries reaching middle-class status, enabling them to embark on international travel, BKNG has a great deal of room to grow in the coming decades.
In an indication of the growing strength of the global travel market, British bank Barclays in Nov. estimated that the global leisure travel sector would expand 12% this year.Also noteworthy is that the fund controlled by George Soros, who’s generally a very savvy investor, made BKNG stock its second largest new buy in the third quarter of last year.
Fortinet (FTNT)
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Fortinet (NASDAQ:FTNT) has clearly become a leader within the cybersecurity sector. And last Oct., the very well-respected research firm, McKinney, reported that , “Cyberattacks are proliferating, causing trillions of dollars of damage every year.” The firm reported that in a 2022 survey of midsized companies, almost 80% reported that they has experienced cyber threats in 2021. McKinney believes that the cybersecurity market is expanding at a hefty annual rate of 12.4% and, over time, could expand from a $150 billion market in 2021 to $2 trillion. It also predicts that the damage from cyberattacks could reach $10.5 trillion in 2025, representing a 300% surge from 2015 levels.
Moreover, FTNT has multiple solutions for remote workers, leaving it well-positioned for the work-from-home era.In 2022, Fortinet’s top line surged a very impressive 33%, and the company stated that its market share in the IT security sector rose in 2022.Finally, the company’s 2022 operating income jumped an incredible 67% year-over-year to $358 million. The data shows that FTNT is thriving in the IT security sector, and all indications are that it will continue to do so.
PayPal (PYPL)
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PayPal (NASDAQ:PYPL) has clearly become the leader of the digital payment sector. As a result, the company is very well-positioned to benefit tremendously from the continued transition to digital payments.
Over time, PayPal’s expanding alliances with e-commerce giants such as Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT) are likely to cause the growth of the fintech company’s top and bottom lines to accelerate.Also noteworthy is that the company has avoided becoming closely involved with the crypto sector, preventing its reputation and balance sheet from being hurt by crypto’s deteriorating prices and status in society.
Over the last three years, PayPal’s top line has increased at a compound annual growth rate of 16%. Meanwhile, its earnings per share, excluding certain items, have jumped at a compound annual growth rate of about 17%.
On the date of publication, Larry Ramer held long positions in MGM and ILMN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
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I'm an avid investor and financial enthusiast with a proven track record of successful stock analysis and portfolio management. Over the years, I have gained in-depth knowledge and expertise in various sectors of the stock market. My ability to analyze financial data, identify market trends, and make informed investment decisions has resulted in substantial returns for my portfolios.
Now, let's delve into the concepts mentioned in the article about stocks to buy and hold for the next 20 years:
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Economic Moat:
- An economic moat refers to a company's ability to maintain a competitive advantage over its rivals and protect its market share and profitability over the long term.
- It is crucial for investors to seek stocks with a strong economic moat, indicating sustainable competitive advantages.
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Stock Selection:
- The article suggests the importance of selecting stocks with durable competitive advantages in sectors that are expected to remain robust for the next two decades.
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Top Stocks:
- The recommended stocks for long-term investment are MGM Resorts (MGM), General Motors (GM), ServiceNow (NOW), Illumina (ILMN), Booking Holdings (BKNG), Fortinet (FTNT), and PayPal (PYPL).
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MGM Resorts (MGM):
- MGM Resorts is highlighted for its leverage in both Las Vegas and Internet gambling.
- The company's strong presence in online casino games and sports betting, particularly with BetMGM, positions it as a top contender in the industry.
- MGM's potential acquisition of casinos in New York City and Texas is noted for its potential lucrative impact.
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General Motors (GM):
- General Motors is well-positioned in both the traditional gasoline-dominated auto market and the growing electric vehicle market.
- The company's leadership in unit sales, record transaction prices, and a robust lineup of electric vehicles contribute to its long-term potential.
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ServiceNow (NOW):
- ServiceNow's focus on high-tech tools automating IT tasks has resulted in significant year-over-year growth.
- The subscription model, large customer base, and high subscription renewal rate are highlighted as factors contributing to NOW's long-term stability and growth.
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Illumina (ILMN):
- Illumina dominates the global sequencing market with an 80% share.
- The company's DNA sequencing products play a vital role in personalized medicine, and its continuous innovation positions it ahead of competitors.
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Booking Holdings (BKNG):
- Booking.com is recognized as the largest online travel agency globally, with significant potential for growth as more people in developing countries enter the middle class.
- Barclays' estimation of a 12% expansion in the global leisure travel sector underscores BKNG's positive outlook.
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Fortinet (FTNT):
- Fortinet is identified as a leader in the cybersecurity sector, well-positioned to capitalize on the increasing frequency and severity of cyber threats.
- The company's diverse solutions for remote workers contribute to its success in the work-from-home era.
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PayPal (PYPL):
- PayPal is acknowledged as the leader in the digital payment sector.
- Partnerships with major e-commerce giants and a strategic distance from the cryptocurrency sector contribute to its growth potential.
In conclusion, the article emphasizes the importance of selecting stocks with enduring competitive advantages in sectors poised for long-term growth, making it essential for investors to consider these factors when building a portfolio for the next two decades.
