Investors who want to build a portfolio’s value over time will seek quality companies. Those stocks to buy have thriving businesses with proven returns on their investments. They are not speculations that report incredible revenue growth but lose more money as they get bigger.
Stable companies have a positive cash flow. They either retain their earnings and invest back in the business or distribute earnings through dividends. The beauty of such companies is they thrive regardless of the economic conditions. For example, the economy could head into a recession, but strong companies will navigate through troubled times.
Companies might have products their customers cannot live without. They might sell goods that are demand inelastic. This lets them pass higher input costs to customers. Markets may already recognize their strong pricing power. Although the stock may trade at a premium, this is worth paying. Chances are good that they will increase their market share as their competitors stumble.
The buy-and-hold investors with a $100,000 portfolio should consider these seven stocks to buy for the long term.
Investors get exposure to technology, real estate, drug store, and fertilizer sectors in the picks list above. They can decrease risk with this diversification in these stocks to buy.
|WBA||Walgreens Boots Alliance||$36.83|
Amdocs (NASDAQ:DOX) is a software and services firm in the communications, media and financial services market. In the fourth quarter, it posted revenue growing by 7.3% year-over-year (YOY) to $1.17 billion. The company expects revenue will grow by 4% to 8% in 2023.
Amdocs enjoyed a strong quarter because customers need more cost savings from the cloud and managed services. It offers more sophisticated technologies. This accelerates the time to market its products. As a result, customers receive faster value sooner.
Amdocs is quick to respond to changing production environments. For example, it brought a product to market after closely monitoring what its customers needed. In managed services, Amdocs is pushing out products that customer renewal rates are high. Managed services grew by 12% in the fourth quarter.
The company has a 12-month backlog. The solid pipeline will cushion the business from any unlikely slowdowns. Customers might delay signing agreements as they look for lower spending. Still, expect strong demand to support the momentum that Amdocs enjoys.
Cisco Systems (CSCO)
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Cisco Systems (NASDAQ:CSCO) is a digital communications tech firm. It has strong momentum in both the Optics and optical systems businesses.
In Optics, Cisco sells routers and switches that data centers or central offices require. Investors holding CSCO stock benefit from a growth in demand for infrastructure spending. In the data center, Cisco sells switches or routers connected to the fiber. It recently introduced a new platform called NCS 1010. Customers may simplify operations with it. For example, they get more capacity running on a layer-zero solution.
Cisco acquired Acacia to add 400-gig ZR Plus to its router optical networking architecture. This increases its reach to web players and service providers. Customers may increase their network capacity to 1.2 terabits. Despite the weakening economy, companies will not slow their investments in infrastructure. Network demand is showing no signs of slowing down.
CSCO stock pays a $1.52 per share dividend.
Crown Castle (CCI)
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This year, it will continue with its consistent set of priorities. It wants to lease up its assets while building more. That way, it increases its market share as demand for data rises. Crown Castle owns towers and small cells. Consistently growing demand for data will drive lease-ups of the company’s existing assets.
In addition, customers want a quality network. They are upgrading their phones and picking services that have better wireless service. This dynamic will renew the rebound in CCI stock that began in late October 2022.
This year, Crown Castle expects to grow by around 5% and up to 6%. It is leading the industry in U.S. tower market growth. This pace will continue for the next few years as the customer upgrade cycle unfolds.
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Intel (NASDAQ:INTC) shares recently indicated a double-bottom support pattern on the chart at $25. At a price-to-earnings (P/E) ratio in the high single digits, markets are discounting the chip giant’s prospects.
PC sales cratered in the last few quarters. Demand peaked during the pandemic, after which consumers and corporations stopped upgrading machines. Intel is unfazed. It is investing heavily in manufacturing around the world. Eventually, the chip cycle will recover and demand will exceed supply. For example, the company is building a factory in Germany. Although it delayed those plans, it wants more subsidies to lower costs.
At Computer Electronics Show 2013, Intel introduced a mobile processor that has 24 cores and runs at 5.6GHz. This solidifies Intel’s dominance in the laptop market. The company also debuted processors that support endurance gaming.
Intel’s Movidius vision processing unit will support artificial intelligence-heavy tasks that professional workers demand. While corporations and consumers cut back on spending, Intel will win their business with its attractive products.
Nutrien (NYSE:NTR) is a Canadian fertilizer company. It produces potash and nitrogen fertilizer. Last week, fertilizer prices sank to almost two-year lows, alongside the drop in natural gas prices.
NTR stock pays a 48-cent quarterly dividend. It rewards income investors while allocating the rest of its cash flow to expand potash production. In 2022, a compressed planting season distorted potash demand. Still, inventory levels fell. The company expects the sector to replenish inventories, especially in North America and Brazil.
Farmers purchased fewer Nutrien products due to unfavorable prices. As prices come down, they will step up to accumulate the fertilizer. That way, they have more than enough material to fulfill their application season.
Nutrien expects to ramp up production to around 18 million tons by 2025. It is highly convinced it will sell the increased volumes as demand more than exceeds supply.
NTR stock trades at a P/E of around 4 times.
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Qualcomm (NASDAQ:QCOM) continued to innovate its mobile chip offering. On Jan. 5, 2023, it announced Snapdragon Satellite. This supports two-way messaging for premium smartphones on the operational Iridium satellite constellation.
QCOM stock dropped to incredibly low valuation multiples. Since October 2022, the stock fell below $110 only to bounce back. Wall Street analysts are bracing for an earnings-per-share (EPS) growth rate in the low- to mid-single digits in the next three to five years.
Last year, smartphone demand fell. Consumers are sensitive to inflationary pressures which hurt their disposable income. The market’s anticipation of slow smartphone sales is hurting Qualcomm’s share price. Value investors may take advantage of the discount by accumulating the stock in the next few months.
To broaden its market beyond phones, Qualcomm announced Snapdragon AR2 for augmented reality glasses. The platform uses 50% less power than the previous generation XR2 Gen 1 platform. In addition, it has 250% more artificial intelligence performance. By using only one watt of power, Qualcomm could become a major supplier of AR glasses.
Walgreens Boots Alliance (WBA)
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Walgreens Boots Alliance (NASDAQ:WBA) is a drug store. The company posted revenue falling by 1.5% to $33.38 billion in its first fiscal year. It expects an adjusted EPS of $4.45 to $4.65. This is above the consensus.
The company will benefit from script recovery as its stores return to normal hours. It invested in hiring staff and in the last quarter, it saw an increase of 23% in applications. The increase in pharmacists will lift same-store prescription-related revenue.
Walgreens is incentivizing customers to return to stores. It is applying marketing incentives. Markets will recognize the store’s performance in the quarters ahead and lift the stock price.
WBA stock pays a dividend of $1.92, which yields more than 5%.
Walgreens is integrating VillageMD, a primary care physician service, with Summit Health. It paid $9 billion to buy Summit Health in November 2022. It expects to realize around $150 million in synergies. Such integration activities will raise its profitability.
On the date of publication, Chris Lau 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.
Chris Lau is a contributing author for InvestorPlace.com and numerous other financial sites. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. He shares his stock picks so readers get actionable insight to achieve strong investment returns.