When it comes to building a portfolio with resilience and growth potential, the mantra to buy long-term stocks continues to resonate with seasoned investors. The art of looking beyond short-term turbulence requires identifying stocks for long-term wealth, which may feel akin to navigating a labyrinth. The secret lies in discerning companies with solid foundations or which offer intriguing products or services, creating a treasure trove of cash to weather unpredictable storms.
Focusing on larger, more established businesses often presents an attractive entry point for long-term stocks. These firms typically embody stability and strength, core attributes to seeking long-term investment. So, while the market buzzes with transient noise, steering your investment compass toward long-term stocks can be rewarding. It’s about weaving patience, insight, and a touch of boldness into your strategies. Here are three long-term stock considerations that I think are nearing attractive entry points.
Humana (NYSE:HUM) stands tall as the fourth-largest health insurance provider in the U.S., showcasing tremendous resilience that deflects economic slowdowns. With minimal impact on premium-related sales, the firm’s recent dip seems to be linked to sentiment than concrete results. Uncertainties about Medicare Advantage cost trends and the cautionary tale of owning health insurance stocks during an election year have raised some eyebrows.
The future looks promising for Humana, with the global health insurance market forecasted to soar 42% to $2.7 trillion annually by 2030. It boasts a customer base of over 20 million members setting it on a fruitful path. Analysts project the company’s earnings to grow at more than a 13% compounded annual rate over the next five years, outpacing the industry’s average of 12%.
The firm posted its second-quarter results in 2023, reporting a robust $26.7 billion revenue, marking a 13% year-over-year growth. While trimming its full-year earnings outlook, the company still casts a bullish eye on its Medicare Advantage business, further buoyed by a 15% year-over-year improvement in sales from its insurance segment to $25.9 billion.
MercadoLibre (NASDAQ:MELI) has emerged as a titan in the South American online retail sphere, operating in 18 different countries, outpacing eCommerce stalwarts like Amazon in market share in areas like Brazil. Over the past decade, Mercado’s growth has been nothing short of spectacular, with the pandemic-led tailwinds adding more fuel to the fire, accelerating e-commerce adoption and positioning it as a top player in the region’s digital economy.
The firm boasts an astonishing record, with 5-year average revenue growth of more than 56% and forward revenue estimates at over 30%. Moreover, its operating cash flow growth is over 30% on a year-over-year basis, more than 4,500% higher than the sector median.
MercadoLibre showcased another stellar performance in its second quarter, with GAAP earnings per share of $5.16, outpacing estimates by 88 cents. Revenue surged to $3.42 billion, a bump of 32.0% year-over-year, beating forecasts by $150 million. Furthermore, the company reported an impressive $42.1 billion in Total Payment Volume, up 96.6% year-over-year on an FX-neutral basis.
Realty Income (O)
Realty Income (NYSE:O) is a compelling real estate investment trust (REIT) specializing in triple-net leases where tenants shoulder maintenance and other costs. It operates over 12,000 properties, focusing on defensive sectors such as food, pharmacies, and consumer services. Its stronghold on such lucrative places, coupled with a consistent monthly dividend payment since the early 2000s, the firm has nurtured trust and reputation.
Moreover, the company flaunts strong upside potential, with its dividend income yielding over 5%. Additionally, with an average target price of over 15% from current price levels, it offers a robust upside for O stock. Anchored by stable tenants such as Walgreens (NASDAQ:WBA) and 7-Eleven (OCTMKTS:SVNDY), and an impressive record of surpassing market expectations over the past decade, this blue-chip stock emerges as an enticing option for long-term investors looking for stability and dynamic profitability.
Realty Income delivered another solid performance in its second quarter, aligning with Wall Street’s expectations, reporting FFO per share of $1.02 and revenue exceeding $1 billion, surpassing the consensus. Moreover, it also raised its outlook for acquisitions and adjusted the lower end of its FFO guidance range. CEO Sumit Roy emphasized an active global pipeline of investment opportunities, highlighting the closure of $3.1 billion in investment volume during the quarter.
On the publication date, Muslim Farooque did not have (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