With the latest encouraging read on inflation sending the market on a high to end the first half of this year, the idea of acquiring the best forever stocks may seem overly cautious. After all, with sentiment strong on apparently justifiable reasons, investors may be better served with risk-on securities. Still, forever stock investments have their place.
Primarily, you never want to have a portfolio that’s geared entirely toward speculation. When you dial up the risk-reward profile, your returns might resemble the game of baseball. A few investments may enjoy moonshot gains. However, the vast majority of your portfolio could suffer losses. That’s why acquiring high-potential forever stocks offer relevancy in practically any market cycle.
More importantly in my view, the economy might not be as strong as advertised. Sure, employment figures are up but so too is the unemployment rate. Also, Americans are carrying a record level of household debt. Should circumstances go awry, most folks might not have the wherewithal to adjust. Therefore, buy long-term stocks because you really don’t know what might happen next.
Honeywell (HON)
While industrial conglomerate and applied sciences giant Honeywell (NASDAQ:HON) won’t exactly light up the excitement indicator, the company offers so many relevancies that it would be practically criminal not to include it in a discussion of best forever stocks to buy. From the mundane to the frontier, Honeywell helps stakeholders sleep easier at night because of demand predictability.
For example, aerospace represents Honeywell’s most profitable business unit. In 2021, this unit generated $11 billion in revenue, according to Statista. Since aerospace probably isn’t going anywhere anytime soon, HON enjoys demand predictability.
On the other end, the company is also involved in efforts to develop advanced electric vehicle batteries. Combined, you have a consistently profitable enterprise that enjoys the flexibility to explore and be relevant for decades to come. To be fair, the three-year revenue growth (per-share basis) of 1.1% isn’t exactly lighting up the board. However, if you want to buy long-term stocks, it’s difficult to ignore Honeywell for the substance it brings to the table.
ASML (ASML)
Easily one of the best forever stocks to buy, ASML (NASDAQ:ASML) specializes in extreme ultraviolet (EUV) lithography. And at that point, the lay observer might wonder, so what (perhaps uttering an expletive or two)? Well, the so-what part is what makes ASML a key talking point for forever stock investments.
Per CNBC, ASML is the only company in the world with EUV lithography machines, which are vital to printing the complex designs associated with advanced semiconductors. Therefore, it’s difficult to envision a paradigm where ASML isn’t relevant. Basically, if you want to get anything done in the chip-manufacturing space, all roads lead to ASML. In the price charts, the underlying shares benefit from the enormous pertinence. Since the beginning of this year, they gained almost 34% of equity value. In the trailing one-year period, they’re up nearly 70%.
Also, as you might expect, ASML benefits from strong revenue and robustly consistent profitability. No hyperbole – ASML sells itself as one of the best stocks for July of this year and every year.
Microsoft (MSFT)
My favorite “cheat” code when it comes to discussing anything in the markets, Microsoft (NASDAQ:MSFT) fits so very nicely in the context of best forever stocks. As with the other enterprises on this list, it’s difficult to imagine a future where Microsoft isn’t relevant. Sure, it’s had some rough moments in years past. At the same time, those struggles helped create a brand known for both consumer and professional products and services.
Of course, the big news surrounding Microsoft centers on its partnership with OpenAI and its chatbot ChatGPT. I’m not entirely sure if artificial intelligence will take over the world. Earlier, when writing up the bit about ASML, I cussed up a storm because I know that Microsoft’s ChatGPT-empowered Bing gave me the wrong answer. Nevertheless, as the underlying technology improves, AI will almost surely become a permanent fixture of society, much like email.
On that basis alone, one should target MSFT as one of the high-potential forever stocks. Financially, you’re getting what you would expect from such a stalwart: strong long-term revenue growth and consistent profitability metrics that beat out most contenders.
AbbVie (ABBV)
It’s quite possible that AbbVie (NYSE:ABBV) may be the most creative take for the best forever stocks to buy. Yes, it’s a pharmaceutical giant so no matter what, it will likely be relevant. That’s not where I’m going with the earlier sentence. Rather, I specifically believe that AbbVie’s acquisition of Allergan – which came with it the Botox brand – gives the acquirer significant blue-sky potential.
Now, many social critics pointed out that millennials – the “me me me generation” – are selfish and self-centered. By logical deduction, I suppose Gen Z and their penchant for TikToks also makes this cohort superficial. However, despite these cohorts making tons of “okay boomer” jokes, I think they fail to understand one thing: everybody eventually becomes a boomer (not literally but you get my point).
So, with so much superficiality permeating society, you’re talking about AbbVie potentially making a landmark deal for Botox. As the wrinkles and panic set in, Botox sales should skyrocket. And because of the size of the millennial cohort, the runway is long and robust. Thus, ABBV is one of the best forever stock investments.
NextEra Energy (NEE)
If you want to buy long-term stocks that organically represent their own pitch person, NextEra Energy (NYSE:NEE) sure makes a compelling case. Listen, I’m not exactly what you would call a go-green tree-hugging renewable energy advocate (as you’ll see below). However, that doesn’t mean I’m blind to the environmental, social, and governance concerns. Renewables are a big deal and NextEra can certainly profit from them.
According to its public profile, NextEra produced about 58 gigawatts (GW) of generating capacity. It’s also the largest electric utility holding firm in the U.S. by market capitalization. With its rich network of renewable energy sources – including wind turbines and solar panels – NextEra proves that going ESG can be quite profitable. However, shares are down more than 11% since the January opener, which may offer a discount for one of the best forever stocks.
Financially, as a utility, it doesn’t offer the most sterling profile, I’ve got to be blunt. At the same time, it’s consistently profitable, which is what you’d expect from its moat. Thus, it’s one of the best stocks for July (especially if you’re a contrarian).
Chevron (CVX)
Okay, after speaking so lovingly about ESG and the renewable energy space specifically, we’ve got to discuss Chevron (NYSE:CVX). Yes, I know it’s a hydrocarbon energy giant. I also understand that the world is pressing forward with alternative solutions. For instance, the burgeoning EV market doesn’t exactly bode well for CVX on paper. However, I think folks dismiss CVX and the underlying industry too quickly.
Fundamentally, Chevron and its ilk benefit from a key scientific fact: fossil fuels command high energy density. As a result, the Brookings Institution states in part, hydrocarbons are difficult to quit. For a gallon of gasoline, you can move a modern combustion-powered car about 20 or 30 miles (maybe more). You’re not getting anywhere close to that figure for the equivalent volume of electrons.
Plus, for EVs to become viable for all uses, the underlying infrastructure will need both overhaul and advancements. For example, the long charging times involved may be a huge hindrance for those that drive for a living (think ride-sharing). Therefore, I anticipate continued relevancy for CVX, making it one of the surprising choices for the best forever stocks.
NuScale Power (SMR)
Given that the context of this discussion centers on investors seeking to buy long-term stocks, such individuals should consider NuScale Power (NYSE:SMR). A participant in the nuclear energy space, it’s understandable that many may have reservations about the business. After all, a few high-profile incidents – and the matter coming to a head right now – don’t exactly help the product evangelism angle.
Still, I’m very attracted to NuScale’s case as one of the high-potential forever stocks because of its specialty: small modular reactors or SMRs. Featuring a physically smaller footprint than traditional nuclear reactors, NuScale can integrate its SMRs across a wider geographical range. Most importantly, such facilities command a strong safety protocol, helping to soothe apprehensions about essentially distributed nuclear power.
Further, said distribution may better enable advanced innovations such as desalination (i.e. converting ocean water into drinking water). With myriad opportunities available, SMR ranks among the best forever stocks to buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.