Top Long Term Stocks to Buy in 2024

The stock market may often feel like a frenzy, with market changes and events happening one after another in quick succession. It is easy to get influenced by the hottest trends, the swings in the prices of popular stocks, and the allure of overnight riches. But amidst this frenzy, many experienced investors choose the quieter path of long-term investments.

You may choose to stay away from all the frenzy by carefully selecting companies that you believe will yield high returns over time, regardless of short-term changes in the market. These stocks may not be in the news all time, they can be either time-tested blue-chip companies or unknown smaller enterprises in industries poised for decades of growth.

List of Top Long-Term Stocks to Invest in 2024

Methodology:

Stocks with the following characteristics have been chosen to be a part of the list of long-term stocks:

1. 5Y Hist Rev Growth (%) 10.00 to 186.87
2. 1Y Hist Rev Growth (%) 10.00 to 2266.67
3. ROCE (%) 15.00 to 151.30
4. 5Y Avg ROI (%) 15.00 to 32.13
5. Debt to Equity (%) 0.00 to 0.50

The above stocks have been ranked as per the 5-year CAGR of their stock price as of January 25, 2024. There are other methods by which you can assess the top long term stocks to invest in. Here are some of the following lists:

Top Long-Term Stocks by ROCE

ROCE or Return on Capital Employed, measures the efficiency with which a company converts the capital infused into it into profits. Hence, companies with higher capital efficiency are more likely to grow fast in the long run.

The above stocks have been ranked as per the ROCE as of January 25, 2024.

Top Long Term Stocks by 5 Year Historical Revenue Growth

The price of a stock is often positively linked to the level of revenue the company earns. The higher the growth of the level of revenue, the higher the growth of the stock price.

The above stocks have been ranked as per the 5-year historical revenue growth as of January 25, 2024.

Top Long Term Investments in Terms of Interest Coverage Ratio

The interest coverage ratio measures the ratio between EBITDA or earnings to the interest expenses. This is a measure of the solvency of the company. If the earnings are too low compared to interest expenses, then the company may face issues in the future. Hence higher the interest coverage ratio, the better it is for the company’s finances.

The above stocks have been ranked as per the interest coverage ratio as of January 25, 2024.

Top Long Term Stocks by Market Capitalisation

Stocks with a high market cap can raise more money through the selling of shares. They can also raise more money by raising loans by putting up a higher value of shares as collateral. Hence, stocks with a higher market capitalisation have a higher chance of long term growth.

The above stocks have been ranked as per their market capitalisation as of January 25, 2024.

Benefits of Long Term Investment

The following are some of the benefits of choosing to invest in stocks with a long-term potential:

1. The compounding effect: Time is your friend in this case. When you invest for the long haul, you harness the power of compound interest multiplying over several years. In other words, your initial investment does not just grow, it generates returns on those returns.
2. Weathering the recessions: Short-term investments may not get adequate time to recover in case a sudden drop in the market hits your portfolio. But long-term stocks are seasoned over many months and years of temporary drops in the market. Their fundamentals are strong enough to weather these temporary troubles, often emerging even stronger from the storm.
3. Dividends: Many long-term champions reward their shareholders with dividends, i.e. regular cash payouts from the company. These can be reinvested, compounding your wealth further, or simply provide a steady stream of income, sweetening the journey.
4. Low monitoring required: With long-term stocks, you can afford to sit back and relax without fearing every big and small dip. In fact is recommended that with long-term stocks, it is better to not touch them for minor concerns as they need time to grow in value.
5. Building a brighter future: By investing in companies that are likely to last in the long term in the future, you are likely to choose organisations that drive innovation and tackle global challenges. By allocating more capital to such companies, you are not just securing your own financial future, but you are also contributing to a better world.

Final Words

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Disclaimer: This article has been written for educational purposes only. The aforementioned stocks are only examples and not recommendations.