“Our favourite holding period is forever.” So says the great Warren Buffett, and who are we to argue! While the practicalities of buying and owning shares in a quality company without ever selling comes with some caveats, it remains a good rule of thumb to aim for. Here are the stocks that five of our free-site writers believe can beat the market for decades upon decades!
Apple
What it does: Apple is one of the world’s leading consumer electronics companies. It’s best known for its production of the iPhone.
By Charlie Keough. I’ve owned Apple (NASDAQ: AAPL) stock for a few years now. I plan to hold it for as long as possible.
There are a few core reasons for this. Firstly, Apple products are used by over 20% of the world’s population. That means the business has an incredible grip over the market. On top of that, it’s incredibly efficient at keeping customers in its ecosystem.
Apple is also in good shape to benefit from the boom in artificial intelligence in the years and decades ahead. The industry is expected to be worth $1.8trn by 2030 and, while Apple has some catching up to do, it has plenty of cash and expertise to excel in the sector.
There are threats. iPhone sales have declined in 2024, especially in China, which is a major market for the business.
But even so, with plans to hold this stock for decades, I’m content with spurts of volatility. I’m in it for the long haul and I’m bullish on Apple’s future.
Charlie Keough owns shares in Apple.
Cardinal Health
What it does: This US-listed company manufactures and distributes healthcare services and products worldwide.
By Dr James Fox. Cardinal Health (NYSE:CAH) is considered one of the Big 3 in the pharmaceutical distribution industry in the United States, and operates worldwide. It has significant market share and operates in a sector that isn’t going anywhere.
While the sector can be rocked by government policy changes, I wouldn’t be surprised to see my fellow Fool writers also pick stocks in this industry. Beyond the obvious and consistent need for healthcare, our aging populations coupled with rising wealth and ill-health rates make this sector very attractive as a long-term pick.
From a valuations perspective, Cardinal currently trades at an attractive 14.4 times forward earnings and has a price-to-earnings-to-growth (PEG) rate of 0.95. This PEG is attractive, but I also see value beyond the medium term – PEG ratios are created using medium-term growth expectations.
Finally, with around $4bn of cash-in-hand, Cardinal is well-placed to pounce on growth opportunities and new business within the market.
James Fox owns shares in Cardinal Health.
Diageo
What it does: Diageo manufactures and distributes premium drinks to around 180 countries.
By Paul Summers: ‘Forever’ is a strong word to use when talking about investments. However, one stock that I’d have no issue holding for a (very) long time is premium alcohol seller Diageo (LSE: DGE).
While glitzy tech companies must continually innovate to stay relevant, this FTSE 100 juggernaut’s products are far less sensitive to change. Yes, tastes may vary over time but Diageo’s bursting portfolio of roughly 200 high-quality brands means that overall demand and earnings stay fairly constant. This helps to support regular hikes to the dividend.
This is not to say that there won’t be tricky periods. As evidence of this, the cost-of-living crisis has hindered sales in some parts of the world and shares are close to a 52-week low.
But I reckon this is all temporary. Once interest rates are cut and discretionary income rises, I’m confident Diageo will get its mojo back.
Paul Summers has no position in Diageo.
GSK
What it does: GSK is the 10th largest pharmaceutical and biotechnology company in the world
By Jon Smith. When looking for stocks that can have a long profitable future, I like to consider examples that have enjoyed a fruitful past. To that end, I like GSK (LSE:GSK).
The pharma giant technically was founded in 2000 as part of a merger, but the individual businesses date back to the 1800’s. More mergers might happen in the future. Regardless of this, it has decades of solid financial results to provide me with confidence in a track record. In the latest results, it reported revenue of £30.3bn and profits before tax of £6.1bn.
A risk going forward is that because it’s such a mature company, share price gains could be limited. It’s up 6.7% over the past year but a rather disappointing 1.5% over the past five years. Yet given the constant need for medical supplies, I see the firm having plenty of demand in the future!
Jon Smith doesn’t own shares in GSK.
London Stock Exchange Group
What it does: London Stock Exchange Group runs the London stock market.
By Alan Oscroft. For a stock that’s stood the test of time, and must have a great chance of carrying on for many more decades, how about the London Stock Exchange Group (LSE: LSEG) itself?
In the past 20 years, its share price has soared by 2,000%.
That has to be down to its safety aspects, and to its very nature. Whether the stock market is rising or falling, the company takes its fees and makes its profit.
And whether companies are doing well or poorly, they have to pay London Stock Exchange Group its dues either way.
My main concern is that the stock valuation is a bit high. The forward price-to-earnings (P/E) for 2024 is at 55. But that would drop to 32 by 2026, if the City’s strong earnings forecasts pay off.
So we could see a few years of share price weakness. But for a ‘buy forever’ stock, I can’t think of anything safer.
Alan Oscroft has no position in London Stock Exchange Group.
