Top Performing Stocks for Long-Term Investment

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The stock market has rewarded many long-term investors with dividends and capital gains. While the stock market is a popular resource for generating wealth, some stocks perform better than others. Finding long-term investment opportunities can lead to good returns while spending less time in your portfolio. This guide will cover some stocks to consider for the long haul.

Quick Look at the Top Performing Stocks for Long Term Investors:

Deep Dive

Investors can choose from thousands of companies that are publicly listed in the stock market. These are the best long-term stocks to consider.

1. Axcelis Technologies Inc. (NASDAQ: ACLS)

Axcelis is a small company with a market cap under $6 billion that has emerged as a top player in the semiconductor industry. The company’s ion implantation technology allows chipmakers to produce the transistors that power all electronics.

2. Fortinet (NASDAQ: FTNT) 

Fortinet is a high-growth cybersecurity stock that has almost quadrupled over the past five years. Companies use Fortinet’s software to increase their cybersecurity, and with the rise of high-profile attacks, Fortinet’s services are more important than ever. Fortinet backs up high revenue growth with high earnings growth as well. Fortinet has been profitable according to generally accepted accounting practices (GAAP) and has maintained positive free cash flow every year since 2009.

3. Microsoft Corp. (NASDAQ: MSFT)

Microsoft is a tech conglomerate with exposure to PCs, video game consoles, the cloud and other business segments. Microsoft Azure is a big profit-maker for the company and has helped it reward shareholders with a nearly 200% gain over the past five years.

4. Public Storage (NYSE: PSA)

Public Storage is a real estate investment trust with the largest portfolio of self-storage facilities. The firm has an occupancy rate above 90% and has branched beyond self-storage. Public Storage also serves clients seeking business solutions, storage for vehicles and boats and climate-controlled storage. Self-storage tends to be resilient during recessions and can continue to deliver cash flow during economic uncertainty.

5. American Express Co. (NYSE: AXP)

American Express is a financial services company that specializes in credit and debit cards. The company is one of the 30 stocks in the Dow Index and has double-digit profit margins. American Express has been in business since 1850.

6. Amazon.com Inc. (NASDAQ: AMZN)

Amazon is a tech conglomerate that has exposure to e-commerce, cloud technology, Twitch, advertising and other revenue-generating opportunities. The company has many business segments that can generate meaningful growth and reward long-term investors.

7. Alphabet Inc. (NASDAQ: GOOGL)

Alphabet has been making attempts to diversify beyond online advertising, but Google and YouTube ads still make up the majority of the company’s revenue. Its duopoly status with Meta Platforms Inc. makes it a top ad-tech giant to consider. If the advertising industry continues its recovery, Alphabet tends to benefit and reward shareholders. 

8. JPMorgan Chase & Co. (NYSE: JPM)

JPMorgan is the largest U.S. bank by assets under management. Some of the bank branches that are now a part of the conglomerate were founded hundreds of years ago. JPMorgan recently acquired First Republic Bank and has the financial might to outperform many bank stocks.

9. The Trade Desk Inc. (NASDAQ: TTD)

The Trade Desk is a high-growth advertising company that specializes in CTV Television Network ads. Shares have jumped by over 550% within the past five years because of incredible top- and bottom-line growth. The Trade Desk gives advertisers more data, which can help clients make better decisions with their ad spend. The Trade Desk has been profitable since 2013. 

10. Perion (NASDAQ: PERI)

Perion is a small ad-tech company that specializes in search, social media and display ads. During this same time, many ad companies reported declining revenue and net income. Perion has a good history of beating guidance and raising expectations.

Long-Term Stocks vs. Short-Term Stocks

Long-term stock investors look at the fundamental analysis when reviewing an asset. They focus on what a stock can be worth in a few years. Short-term stock investors focus on technical analysis and price fluctuations. Short-term stock investors predict how much a stock can be worth in a few weeks by reviewing technical indicators.

Pros

Investing in long-term stocks can generate higher returns and decrease the amount of time you spend in your portfolio. If you sell a long-term stock in a few years, you will get taxed at the long-term capital gains rate. This rate is more favorable than the short-term capital gains rate you have to pay if you hold onto a stock for less than 365 days. 

How to Choose

Investors can choose from several long-term stocks. Focusing on these factors can increase the likelihood of buying profitable long-term investments.

Company Fundamentals

Investors should look at changes to a company’s year-over-year revenue and earnings. The balance sheet and valuation offer more insights into a company and can help investors make optimal decisions for their portfolios.

Industry Analysis

Every company has competitors, and they all operate within the same industry. Industry woes will drag down most, if not all, of the companies within that industry. However, rising demand for the industry can lift the stocks in that sector. Some exceptions apply and can indicate compelling buying opportunities or red flags.

Dividend History and Growth

Some investors look at a company’s dividend history to see whether it raises the dividend each year. Dividend hikes indicate confidence and increase an investor’s cash flow. Some investors prefer growth stocks with high potential returns that do not offer dividends. However, if a stock offers dividends, you should check its history to see whether the company has been raising the dividend each year.

Valuation Metrics

Valuation metrics can help you determine whether a stock is fairly priced, undervalued or risky. The P/E ratio is a useful metric for investors focusing on profitable companies. Some investors also look at the PEG ratio to gauge whether the company is fairly valued based on its future growth potential. 

Risk Management

Investors should review their portfolios before adding new positions. Overexposure to one stock or sector can leave your portfolio vulnerable during contractions. Spreading your capital across various stocks and sectors minimizes your risk. Investors should consider their risk tolerances before making investments.

Where to Buy

Frequently Asked Questions