It’s unclear what’s in store for stocks in the short-term. On one hand, it’s possible the market has already bottomed out. On the other hand, inflation and recession fears could mean more volatility ahead. So then, what’s the best move? Focus on adding more long-term stocks to your portfolio.
That is, stocks in companies with strong long-term prospects. They may not be the “hottest” names out there, but with a high chance of delivering steady growth over many years (or in some cases, decades), buying these names now, while they trade for favorable valuations, could look like a wise move in hindsight.
When it comes to long-term stocks, you have many options. The market downturn has resulted in many high-quality names becoming oversold. These seven, however, currently all earn “A” ratings in my Portfolio Grader. Consider each of them as possible buy and hold positions to add to your own portfolio.
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C.H. Robinson Worldwide, Inc. | $106.21 | |
Dollar Tree, Inc. | $156.16 | |
The Hershey Company | $207.55 | |
OGE Energy Corp. | $36.51 | |
Grupo Aueroportuario del Pacífico, S.A.B. de C.V. | $140.43 | |
Pilgrim’s Pride Corporation | $30.10 | |
ZIM Integreated Shipping Services Ltd. | $51.63 |
Long-Term Stocks to Buy: C.H. Robinson Worldwide (CHRW)
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Based in Eden Prairie, Minnesota, C.H. Robinson Worldwide (NASDAQ:CHRW) is a third-party logistics provider. It plays a vital role in the supply chain, brokering truckload and intermodal freight transport. Along with this, it also helps connect shippers of goods with air and ocean freight service providers.
As seen from its latest financial results, the supply chain crisis has been a tailwind for the company. In the March quarter, revenue was up 41.9% year-over-year and net income was up 56%. Yet this revenue and earnings growth hasn’t resulted in blockbuster moves for CHRW stock. Shares are up just 7.8% in the past twelve months, and are down 1.1% year-to-date.
Why? Possibly, because investors are skeptical this strong performance will continue. However, the market may be overestimating how quickly the logistics market normalizes. Trading for just 14.7x this year’s estimated earnings, consider it a buy.
This stock earns an “A” rating in my Portfolio Grader.
Dollar Tree (DLTR)
Source: shutterstock.com/Jonathan Weiss
When you think of “long-term stocks,” Dollar Tree (NASDAQ:DLTR) is definitely a name that should come to mind. So far, it’s managed to continue performing well operationally, despite inflationary pressures. This is in sharp contrast to big-box names, which due to elevated inflation have been dealing with squeezed margins and excess inventory.
The nature of its business (discount retailing) also makes DLTR stock appealing as a recession-resistant stock. But these more near-term factors aren’t the sole reason to own it. Even as today’s challenges clear up, this retailer has a strong chance of continuing to deliver steady revenue and earnings growth.
In turn, this will enable the stock, a strong performer in recent years, to carry on moving toward new highs. Pulling back, after making a recovery from its drop in mid-May due to the retail stock sell-off, today is a great time to start accumulating a long-term position.
This stock earns an “A” rating in my Portfolio Grader.
Long-Term Stocks to Buy: Hershey Company (HSY)
Source: George Sheldon / Shutterstock.com
So far in 2022, investors have dived into Hershey Company (NYSE:HSY) shares, due to its merits as a “safe harbor” stock. The famed confectionary and snack company has historically been recession-resistant. The company is also handling inflation well, as seen from its strong quarterly results, and subsequent guidance raise.
This has helped HSY stock stay in the green for the year. Don’t view this as a sign that it’s topped out though. Even as its strong prospects are highly reflected in its current valuation. Per sell-side analyst earnings forecasts, it’s expected to deliver consistent earnings growth over the next few years.
This points to it sustaining its current valuation, and moving gradually higher in line with increased earnings. Add in its 1.69% dividend, which has grown an average of 7.83% per year over the past five years, and solid returns likely lie ahead for shares.
This stock earns an “A” rating in my Portfolio Grader.
OGE Energy Corp. (OGE)
Source: IgorGolovniov / Shutterstock.com
OGE Energy Corp. (NYSE:OGE) is an electric utilities company. As I’ve discussed before, it’s also involved in midstream natural gas. It may not be a household name outside the areas in which it serves (Oklahoma and Arkansas), but that shouldn’t be a reason to skip out on it.
Why? For starters, it’s a high-quality dividend stock. OGE stock has a forward dividend yield of 4.53% at today’s prices. This dividend has grown an average of 6.66% over the past five years. Earnings growth will likely enable it to raise its rate of payout at a moderate pace.
To top things off, the company has been investing heavily into clean energy, such as solar. This gives it exposure to an important long-term trend. With a lot that’s favorable, and little that is unfavorable, OGE is another great choice for long-term investors.
This stock earns an “A” rating in my Portfolio Grader.
Long-Term Stocks to Buy: Grupo Aeroportuario del Pacífico SAB de CV (PAC)
Source: frank_peters / Shutterstock.com
Put simply, in the U.S., privately-operated airports aren’t a thing. There’s only one privately-operated commercial airport stateside. Yet outside the U.S., they are more common. For example, in Mexico, where Grupo Aeroportuario del Pacifico SAB de CV (NYSE:PAC) operates twelve of them in (as its name suggests) the western coast of Mexico.
As InvestorPlace’s Ian Bezek has argued, there are many advantages to investing in airports. Airports are a state-sanctioned monopoly, and an inflation hedge. These advantages have enabled this company to deliver strong results over many years. They’ve also made PAC stock a winning long-term investment.
This will likely continue. Perhaps not to the extent seen in prior years when this stock was more under-the-radar. Nevertheless, it’s still a reasonably-priced opportunity to add to your watchlist and possibly add to your portfolio. Valuation is favorable, with its forward price-to-earnings (P/E) multiple of 24.2x.
This stock earns an “A” rating in my Portfolio Grader.
Pilgrim’s Pride (PPC)
Source: Lori Martin / Shutterstock.com
Rising meat prices are bad news for consumers, but for Pilgrim’s Pride (NASDAQ:PPC), it’s been a boon for its sales and earnings results. Passing higher costs to customers, this poultry and pork products processor is expected to report $3.31 per share in earnings this year.
That’s a massive improvement from the earnings per share EPS reported in 2021 (13 cents per share) and in 2020 (39 cents per share). If you think this is fully factored into the PPC stock price, think again. Although shares have spiked since February, it’s still cheap. At today’s prices, it trades for just 12.8x earnings.
Yes, the meat business is cyclical. It’s already trading near what it traded for in 2017, when it last reported similarly-strong earnings. However, if you are bullish that elevated inflation will last longer than expected, PPC’s earnings could remain at elevated levels for years to come.
This stock earns an “A” rating in my Portfolio Grader.
Long-Term Stocks to Buy: ZIM Integrated Shipping Services Ltd. (ZIM)
Source: ImagineStock / Shutterstock.com
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is an Israel-based container ship operator. It’s taken a big dive since March, after paying out a special dividend. A pullback in shipping prices (which spiked due to the supply chain crisis) has also had a major negative impact on its recent performance.
Yet does this mean you’ve missed the boat with ZIM stock? Not so fast. As I discussed back in April, even as shipping prices move lower, it’s going to take time for them to normalize. A drop in earnings next year, compared to this year’s windfall, is more than reflected in its current valuation.
ZIM today trades for just 3.5x estimated 2023 earnings. 2023 earnings are expected to be 67% below expected earnings for this year. With this shipping giant continuing to grow its business, by expanding its fleet, long-term growth potential looks promising as well.
This stock earns an “A” rating in my Portfolio Grader.
On the date of publication, Louis Navellier had long position(s) in PPC and ZIM. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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