Investing for the long term is a way to build serious wealth over time. Choosing the best long term stocks investment requires careful thought on many factors including financials, sector and growth potential. Here’s a comprehensive guide to some of the top long term stocks, including their sectors, risks, rewards and suitability for different types of investors.
What is Long Term Investment
Long term investment is buying and holding stocks for several years and allowing them to grow in value and generate returns through dividends and capital appreciation. This is where the power of compounding comes in where returns on investment are reinvested to generate even more returns. Long term investing is best for those who want to build wealth gradually, save for retirement or fund future goals.
Criteria for Long Term Stocks
Choosing stocks for long term investment involves considering:
- Â Sector and Growth Potential: Sectors like technology, healthcare and consumer staples tend to be more resilient and grow over time.
- Â Financials of the Company: Companies with strong balance sheet, consistent cash flow and low debt are more likely to weather economic storms.
- Â Dividend History: Companies with a history of paying dividends are more stable and less volatile.
-  Risk and Reward: Understanding the risk and reward of a stock is important. This includes looking at the company’s market position, competition and broader economic factors.
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Long Term Stocks
Here are some of the best long term stocks investment to consider, along with their sectors, who they are suitable for and the risks and rewards.
Apple Inc. (AAPL)
- Â Sector: Technology
- Â Market Cap: $2.8 Trillion (approx.)
- Â Dividend Yield: 0.5%
- Â 5 Year Return: 368%
Who’s it for: Apple is for growth investors who are into technology sector, especially those who value innovation and brand.
Risks and Rewards: Apple’s success is tied to consumer spending and global economic conditions. While its products like iPhone and Mac are popular globally, any economic downturn can impact sales. But Apple’s diversification into services and its cash reserves provide a cushion against such risks. The company’s brand loyalty and consistent product innovation makes it a long term stock.
 Microsoft Corporation (MSFT)
- Â Sector: Technology
- Â Market Cap: $2.5 Trillion (approx.)
- Â Dividend Yield: 0.9%
- Â 5 Year Return: 312%
Who’s it for: Suitable for investors seeking exposure to the technology sector, especially in cloud computing and software.
Risk and Rewards: Microsoft’s position in the software industry, especially with Office, and their rapid move into cloud with Azure is a good base for growth. But they have a lot of competition in both areas and are under regulatory scrutiny. Despite that, their consistent revenue growth and diverse business model makes them a long term investment.
 Amazon.com Inc. (AMZN)
- Â Sector: Consumer Discretionary / Technology
- Â Market Cap: $1.5 Trillion
- Â Dividend Yield: N/A
- Â 5 Year Return: 272%
Who’s it for: For investors looking for high growth in e-commerce and cloud.
Risk and Rewards: Amazon’s dominance in e-commerce and cloud through AWS is a big growth opportunity. But they are in super competitive markets and retail has thin margins. Amazon’s ability to innovate and expand into new areas like healthcare and logistics is big rewards but also big risk of overextension.
Alphabet Inc. (GOOGL)
- Â Â Sector: Communication Services / Technology
- Â Market Cap: $1.8 Trillion
- Â Dividend Yield: N/A
- Â 5 Year Return: 232%
Who’s it for: For investors interested in digital advertising, search engines and emerging tech like AI.
Risk and Rewards: Alphabet’s dominance in the digital advertising space, mainly through Google and YouTube is a stable and growing revenue stream. But they have regulatory challenges and competition in many areas. Alphabet’s investments in AI, cloud and autonomous vehicles is a growth opportunity but also big risk.
JPMorgan Chase & Co. (JPM)
- Â Sector: Financial Services
- Â Market Cap: $450 Billion
- Â Dividend Yield: 2.8%
- Â 5 Year Return: 45%
Who’s it for: For conservative investors looking for stability in the financials with a big bank.
Risk and Rewards: JPMorgan Chase is a bank, investment and financial services company with a diversified business model and strong balance sheet. They are exposed to risks like economic downturns, interest rate changes and regulatory changes. But with a strong dividend yield and a long history of steady performance, they are a good long term play for investors.
BHP Group Ltd. (BHP)
- Â Sector: Basic Materials / Mining
- Â Market Cap: $190B
- Â Dividend Yield: 5.4%
- Â 5 Year Return: 85%
Who’s it for: For investors looking for exposure to the mining and natural resources sector, especially those interested in dividends.
Risk and Rewards: BHP Group is a global mining company with diversified operations in iron ore, copper, coal and petroleum. Their performance is tied to global commodity prices so they are vulnerable to economic cycles and demand fluctuations. But with a focus on efficiency, cost reduction and a strong dividend yield, they are a good option for income focused investors.
Celsius Holdings Inc. (CELH)
- Â Sector: Consumer Staples / Beverages
- Â Market Cap: $10B
- Â Dividend Yield: N/A
- Â 5 Year Return: 2,500+
Who’s it for: For growth oriented investors looking to play the health and wellness trend in the beverage space.
Risk and Rewards: Celsius has grown rapidly with their popular energy drinks targeting health conscious consumers. But they face competition from larger beverage companies and need to continue to innovate to stay ahead of the curve. The high growth comes with high risk, especially if consumer preferences shift or larger competitors get more aggressive.
Enbridge Inc. (ENB)
- Â Sector: Energy / Utilities
- Â Market Cap: $85B
- Â Dividend Yield: 7.1%
- Â 5 Year Return: 35%
Who’s it for: For income focused investors looking for stable dividends in the energy infrastructure space.
Risk and Rewards: Enbridge is a leader in energy transportation and distribution in North America. Their extensive pipeline network provides a steady and predictable revenue stream. But Enbridge faces regulatory challenges, environmental concerns and commodity price fluctuations. Despite those risks, their high dividend yield and essential infrastructure make them a good long term play for income focused investors.
United Parcel Service Inc. (UPS)
- Â Sector: Industrials / Transportation
- Â Market Cap: $160B
- Â Dividend Yield: 3.3%
- Â 5 Year Return: 120%
Who’s it for: For investors looking for stability in the logistics and transportation space with a dividend.
Risk and Reward: UPS is the global leader in logistics and package delivery and benefits from the growth of e-commerce and global trade. The company’s big network and efficient operations are a competitive advantage. But UPS has risks like rising fuel costs, labor issues and competition from other logistics companies. The dividend and the industry growth make it a good long term play.
Verizon Communications Inc. (VZ)
- Â Sector: Communication Services / Telecommunications
- Â Market Cap: $155B
- Â Dividend Yield: 7.1%
- Â 5 Year Return: -5%
Who’s it for: For income focused investors looking for stability in the telecom space.
Risk and Reward: Verizon is a big player in the telecom industry, wireless, broadband and media services. The high dividend yield makes it attractive to income focused investors. But Verizon has challenges like intense competition, high capex and regulatory pressures. Growth is moderate but the stable cash flow and consistent dividend payments provide a buffer against these risks.
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AT&T Inc. (T)
- Â Sector: Communication Services / Telecommunications
- Â Market Cap: $110B
- Â Dividend Yield: 7.5%
- Â 5 Year Return: -30%
Who’s it for: For income focused investors looking for high dividends in the telecom space but willing to take some risk.
Risk and Reward: AT&T has a long history of paying high dividends so it’s attractive to income investors. But the company has struggled with debt and competition and the stock price has declined. The spin off of Warner Media and focus on core telecom services are steps towards stabilization but come with risks. Investors should weigh the high dividend yield against the potential continued financial challenges.
CVS Health (CVS)
- Â Sector: Healthcare / Retail
- Â Market Cap: $100B
- Â Dividend Yield: 3.1%
- Â 5 Year Return: 25%
Who’s it for: For investors looking for stability in the healthcare space with exposure to retail and pharmacy services.
Risk and Reward: CVS Health is in the healthcare and retail pharmacy space, a mix of stability and growth. The acquisition of Aetna has diversified the revenue streams and positioned the company well in the managed care space. But CVS has competition from other healthcare providers and regulatory pressures. The dividend and diversified business model make it a good long term play.
Ford Motor Co. (F)
- Â Sector: Consumer Discretionary / Automobiles
- Â Market Cap: $50B
For: Investors looking for exposure to the auto sector with a focus on electric vehicles and a high dividend yield.
Risk and Reward: Ford is an old auto company going electric. This best long term stocks investments in EVs and autonomous driving are growth opportunities but the transition is tough with competition from other old auto companies and new entrants like Tesla. The high dividend and established presence is attractive but don’t forget the risks of the auto sector transformation.
Kroger Co. (KR)
- Â Sector: Consumer Staples / Retail
- Â Market Capitalization: $35 Billion (approx.)
- Â Dividend Yield: 2.3%
- Â Five-Year Return: 45%
For: Conservative investors looking for stability in the consumer staples sector with exposure to retail grocery.
Risk and Reward: Kroger is one of the largest grocery retailers in the US, benefits from stable demand for food and household essentials. Kroger has also expanded its digital presence and delivery services which has driven growth. But Kroger faces competition from other grocery chains and online retailers like Amazon. The company’s consistent dividend and strong presence makes it a best long term stocks investment choice.
Discover Financial Services (DFS)
- Â Sector: Financial Services / Consumer Finance
- Â Market Capitalization: $28 Billion (approx.)
- Â Dividend Yield: 2.3%
- Â Five-Year Return: 55%
For: Investors looking for exposure to the financial services sector, particularly consumer finance.
Risk and Reward: Discover Financial Services is a big player in consumer finance, offers credit cards, personal loans and banking services. The company has a strong brand and growing customer base. But it’s exposed to economic downturns, rising interest rates and competition. Despite those risks Discover’s solid dividend and consistent profitability makes it a good long term choice.
Hartford Financial Services Group (HIG)
- Â Sector: Financial Services / Insurance
- Â Market Capitalization: $22 Billion (approx.)
- Â Dividend Yield: 2.2%
- Â Five-Year Return: 65%
For: Investors looking for stability and dividends in the insurance sector.
Risk and Reward: Hartford Financial Services is an old insurance company with a diversified portfolio of products, life, property and casualty insurance. The company’s strong balance sheet and consistent dividend makes it attractive to income investors. But Hartford is exposed to natural disasters and changes in insurance regulations. Despite those challenges the company’s solid financials and strong presence makes it a good long term choice.
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FirstEnergy Corp. (FE)
- Â Sector: Utilities / Energy
- Â Market Cap: $22B
- Â Dividend Yield: 3.8%
- Â 5 Year Return: 10%
Who’s it for: Conservative investors looking for utility dividend income.
Risk and Rewards: FirstEnergy is a big electric utility company serving customers in several states. Stable cash flows and a high dividend yield make it attractive to income investors. But FirstEnergy has regulatory risks and the challenge of going green. Despite those risks, stable operations and focus on shareholder value make it a long term holding.
Conclusion
Best long term stocks investment requires looking at each company’s financials, industry and growth potential. The stocks in this article are leaders in their sectors and have performed well over time. Investing in the stock market has risks but these companies offer a balance of stability and growth so are good long term holdings.
For investors it’s important to diversify your portfolio across sectors to reduce risk and take advantage of different growth opportunities. Whether you’re a conservative investor looking for dividend income or a growth investor looking for high returns there’s a stock in this list for you. Always do your research and consider your financial goals before investing.
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