3 Stocks to Buy and Hold for Decades

3 Stocks to Buy and Hold for Decades

It can take a long time to research companies and figure out which investment is right for you. And even after you’ve finished the hard part of picking a stock, there’s still no guarantee that its share price will go up, of course.

But you can increase your chances of finding solid long-term investments — think decades, not months — by looking for companies that have the right management, strong financials, and the potential to move into new markets. To help you find those companies, we asked three Motley Fool investors for stocks that they think you can buy and hold for decades, and they came back with Prudential Financial (NYSE: PRU), 3M (NYSE: MMM), and Microsoft Corporation (NASDAQ: MSFT). Here’s why.

A company so solid it uses an actual rock as its corporate symbol

Chuck Saletta (Prudential Financial): For a company’s stock to be worth holding for decades, it needs to be a solid enough business that investors have good reason to believe it will last at least that long. The term “rock-solid” comes to mind, which helps make insurance giant Prudential Financial worth considering. Prudential Financial cares so much about its underlying financial strength that it uses the Rock of Gibraltar as its corporate symbol.

It backs up that symbolism with real strength, too. Its balance sheet sports a debt-to-equity ratio below 0.7 and a current ratio above 1, both of which indicate a conservative approach to managing its own finances. And while past performance isn’t a guarantee of future results, Prudential Financial has over 140 years of insurance and financial operations under its belt. That gives credibility to its claims of financial strength, as those 140 years include some pretty tumultuous economic times.

Perhaps even better for investors looking to initiate a position, Prudential Financial trades at what looks like a reasonable valuation. Its shares can be purchased for around 10 times its expected forward earnings and just above its book value. Although insurance profits can swing wildly from year to year if claims exceed expectations, over the next five or so years, Prudential Financial is expected to be able to increase its earnings by just over 11% annualized.

As a rock-solid company at a reasonable price and with well over a century of proven staying power, Prudential Financial may very well be worth buying today to hold for decades.

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