Locking-down positions at more-than-reasonable prices, these types of stocks can generate more-than-satisfactory returns for your portfolio, in two ways. First, from steady returns via dividends. Many of the stocks in this category not only pay a dividend but have a solid track record of dividend growth as well.
Second, and more importantly, from strong price appreciation over a long timeframe. While most of the names in the “long-term stocks to buy and hold” category are mature, established companies, don’t confuse maturity with zero-growth.
At least, “zero growth” isn’t a risk with these seven long-term stocks to buy and hold. All of them have catalysts in play to drive earnings and share-price growth in the years ahead. Each one also earns an A rating in Portfolio Grader.
| ALB | Albemarle | $316.35 |
| COP | ConocoPhillips | $133.03 |
| ENPH | Enphase Energy | $297.94 |
| LMT | Lockheed Martin | $462.04 |
| OXY | Occidental Petroleum | $74.40 |
| PBR | Petroleo Brasileiro | $11.90 |
| XOM | ExxonMobil | $113.37 |
Albemarle (ALB)
Albemarle (NYSE:ALB) shares have taken off in recent years, thanks to booming demand for lithium by the electric vehicle industry. Lithium is essential in the production of EV batteries, and this basic materials company is a leading purveyor of lithium compounds.
Yet even as ALB stock has more than tripled in price over the past two years, it’s not too late to enter a position. As I discussed earlier this month, this A-rated stock trades at a relatively-low valuation (15.5 times earnings) relative to the company’s growth prospects.
After the massive jump in lithium prices, fears are growing that a “lithium correction” is around the corner. However, chances are this is an overreaction. With EV adoption accelerating, demand for lithium is likely to remain robust in the years ahead. ALB also pays a 0.49% dividend and has raised its dividend payout 27 years in a row.
ConocoPhillips (COP)
Like other integrated oil and gas stocks, ConocoPhillips (NYSE:COP) has performed well compared to the overall stock market. Shares are up more than 80% in the past year, versus a decline for the S&P 500.
That said, between the slide in oil prices, and the push for a post-carbon future, you may be skeptical that A-rated, low-priced (trading for 9.4 times earnings) COP stock is a buy. A look at the details, though, signals why these concerns are unfounded.
In the near term, while crude oil prices may not make a return to triple-digit levels, tight supplies stand to outweigh any drop in demand due a recession, keeping prices elevated.
“Global net-zero” notwithstanding, fossil fuels will remain an essential energy source for at least several decades. ConocoPhillips is also diversifying into clean/renewable energy, with projects in areas like carbon capture and hydrogen gas.
Enphase Energy (ENPH)
With a high valuation (67 times earnings), and a lack of a dividend, admittedly Enphase Energy (NASDAQ:ENPH) differs somewhat from the long-term stocks to buy and hold listed above and below. Still a company in the growth stage, it may seem risky on the surface,
Yet given its exposure to favorable energy trends, you may want to buy ENPH stock now, as it’s only in the early stages when it comes to high revenue/profitability.
Enphase builds microinverters that enable end-users to manage and store energy derived from solar panels. The European energy crisis has created strong demand for such products.
In turn, this has played a big role in Enphase’s strong operating performance last quarter. Sales were up 20% on a sequential (year-over-year) basis. Going forward, high European demand, plus rising demand stateside thanks to recently-passed tax incentives, will keep ENPH in high-growth mode.
Lockheed Martin (LMT)
Defense contractor Lockheed Martin (NYSE:LMT) has been a solid defensive stock thus far in 2022. Sharply gaining earlier this year, following the start of the Russia/Ukraine war, shares resumed zooming higher last month, after the company beat on quarterly earnings and reaffirmed its 2022 outlook.
More recently, though, LMT stock has pulled back. Chalk it up to some extent to the 2022 U.S. midterm election results, but mainly due to a Twitter impersonation incident that occurred on Nov. 11. However, this latest round of weakness may be a great entry for a long-term position in LMT.
No matter the end result when all the midterm votes are tallied, rising geopolitical tension points to spending continuing to climb, pointing to further growth ahead for Lockheed Martin. LMT, which earns an A in Portfolio Grader, trades for a 17.2 times earnings, and currently pays a 2.59% dividend.
Occidental Petroleum (OXY)
Up more than 135% so fare this year, Occidental Petroleum (NYSE:OXY) has been boosted by more than just spiking oil and gas prices. The continual purchase of shares in the energy company by Warren Buffett’s company, Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B) has been a secondary catalyst for the stock in 2022.
Still, long-term investors should consider OXY stock, for its high potential to generate steady, worthwhile returns, not only in the coming years, but perhaps the coming decades as well.
Besides benefiting from favorable trends for fossil fuels, Occidental also has a big “green catalyst” in play. That is, the company’s “net zero oil” project could one day become as large as its chemicals business, a meaningful contributor to the bottom line.
Earning an A rating in Portfolio Grader, OXY remains low-priced (earnings multiple of 7.5), even after its incredible run.
Petroleo Brasileiro (PBR)
Shares in Brazil-based Petroleo Brasileiro (NYSE:PBR), better known as Petrobras, have been hit hard by political changes in its home market.
With left-wing candidate Luiz Inacio Lula da Silva (or “Lula” for short) winning last month’s Brazilian Presidential election, there’s now high uncertainty about his plans for Petrobras, which, while publicly traded, is still controlled by the Brazilian government.
So, with potential political headwinds in play, why make PBR stock a buy? For starters, the market may be overreacting to the forthcoming Lula Presidency. While winning control of the executive branch, his political opposition still controls Brazil’s legislative branch. This could limit to what extent Lula is able to implement changes unfavorable to the company.
With high-risk already overly-priced into A-rated PBR stock, with its super-low valuation (2.7 times earnings), and high trailing dividend yield (50%), this stock could produce outstanding returns, if the status quo remains.
Exxon Mobil (XOM)
Up nearly 80% year-to-date, and still climbing, ExxonMobil (NYSE:XOM) has clearly been a winner for investors in the near term. However, when it comes to the integrated oil and gas giant’s future prospects, many investors may be less confident.
Fortunately, much like with COP and OXY, XOM stock is not “doomed” to produce middling returns going forward. Instead, there is a path for this blue-chip energy stock to remain a worthwhile long-term holding. Besides the aforementioned favorable trends, factors specific to ExxonMobil also point to continued gains ahead.
Namely, the company’s focus on return-of-capital efforts such as dividends and buybacks, instead of spending more heavily on risky exploration projects with questionable return-on-investment (or ROI) potential.
ExxonMobil is also diversifying into clean/renewable energy. Earning an A in Portfolio Grader, XOM trades for 8 times earnings, and has a forward dividend yield of 3.2%.
On the date of publication, Louis Navellier has positions in COP, ENPH, LMT, OXY, PBR and XOM. 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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