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2 unstoppable stocks to buy and hold forever

Investing for the long term, unlike day trading, offers many advantages. Holding company shares for a while arguably brings greater peace of mind, some tax benefits, and the opportunity to let compounding work its magic. But which companies are worth investing in for good?

There are about as many candidates as there are stocks on the market. With most companies, investors will believe they are excellent long-term bets. That’s obviously not always the case, but let’s look at two solid “forever” investments that will help you sleep peacefully at night: UnitedHealth Group (NYSE: UNH) And Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B).

1. UnitedHealth Group

UnitedHealth Group is a leading healthcare company offering a wide range of services. Its subsidiary, Optum, provides primary and specialty care solutions to patients, data and analytics services to third-party payers (including government payers), hospital systems, life science companies and pharmacy care services. UnitedHealth Group is also a leading insurer.

It’s hard to argue with a company that serves virtually the full spectrum of healthcare stakeholders, some of whom use the company’s products to improve their operations and deliver better patient outcomes. While the healthcare industry will certainly change and evolve, it’s difficult to see all – or even most – of UnitedHealth Group’s solutions becoming completely obsolete.

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UnitedHealth Group has generally solid financial results. Last year, revenue rose 15% year-over-year to $371.6 billion – a solid performance. Adjusted earnings per share of $25.12 grew about 13% compared to the same period a year ago. But why do we think UnitedHealth Group can continue to do this? Here’s one key reason: the company’s vertically integrated operations and extensive network of physicians, patients and other institutions that use the company’s services give it a solid competitive advantage.

The brand name is associated with excellence in providing critical healthcare services. That’s partly why UnitedHealth Group will have a 15% share of the U.S. insurance market as of 2023. However, the Optum business has been an even bigger growth driver. Last year, Optum’s revenue was $226.6 billion, up 24% from the previous year. Both segments should benefit from an important long-term trend: the aging of the world’s population and a growing need for the types of services it provides.

That’s why the company hasn’t reached a ceiling yet; far from it. Long-term investors will benefit from adding shares of this stock to their portfolios.

2. Berkshire Hathaway

Berkshire Hathaway may be the ultimate forever stock for at least two reasons. First, it is a huge, multinational conglomerate made up of many smaller companies in different sectors. It owns several well-known brands, including insurance giant GEICO, kitchenware product company Pampered Chef, clothing company Fruit of the Loom, and many more.

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Berkshire Hathaway is an incredibly diverse play that should continue to perform quite well regardless of economic conditions. That is a significant competitive advantage.

Second, Berkshire Hathaway is led by one of the greatest investors ever: Warren Buffett himself. The Oracle of Omaha famously has a long-term focus. That’s how he built his company to last, and that’s why it has been so successful for a long time. Berkshire Hathaway has delivered market-beating returns to its long-term shareholders. Some might point out that Warren Buffett is no spring chicken. The man is already well into his nineties.

The recent death of the conglomerate’s second leader – and Buffett’s longtime friend – Charlie Munger may have brought this issue to the forefront for some investors. However, Buffett and Munger have spent a lot of time creating not just a company, but a culture that should outlive them. The man chosen to replace Buffett at the helm of Berkshire Hathaway is the vice chairman of the company’s non-insurance business, Gregory Abel.

Someone as cautious as Buffett wouldn’t just pick anyone to replace him as head of his company, and Abel inherits a well-oiled, well-functioning machine. Berkshire Hathaway’s future looks excellent. With a market cap of $885 billion, it should be a trillion-dollar stock within a year or two. Berkshire Hathaway will continue to grow for a long time after that.

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Should You Invest $1,000 in UnitedHealth Group Now?

Consider the following before purchasing shares in UnitedHealth Group:

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Prosper Junior Bakiny has no position in any of the shares mentioned. The Motley Fool holds positions in and recommends Berkshire Hathaway. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.

2 Unstoppable Stocks to Buy and Hold Forever was originally published by The Motley Fool

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