Good Stocks to Invest in Right Now for Long-Term Growth
With many stocks down well over 20% in 2022, investors are losing confidence in the market. Yet the drawdown offers a chance to find good stocks to invest in for long-term growth.
Although many leaders are bouncing back this month, gloomy economic forecasts are stoking recession fears. Meanwhile, the CPI index, a popular measure of inflation, came in higher than expected, swelling over 9% YOY.
With inflation rising, consumers have less to spend elsewhere in the economy. As a result, businesses are left fighting over a smaller market. We already see some of the effects.
For example, J.P. Morgan (NYSE: JPM), the largest bank in the U.S, talked about a “modest deterioration” in its economic outlook. As a result, the bank is raising cash to provide a buffer for worst-case scenarios such as a recession.
At the same time, Jamie Dimon, JPM’s CEO, says consumers and businesses are in “good shape,” at least for now. Lastly, he highlights that the “economy will be bigger in 10 years.”
Below you will discover good stocks to invest in right now that are positioning themselves for explosive growth over the next ten years.
What Are Good Stocks to Invest in Right Now?
No. 5 Lockheed Martin (NYSE: LMT)
- Industry: Space & Defense
- Annual Revenue: $67B
With no end in sight to the war in Ukraine, spending on defense is taking priority. And the world’s largest defense firm, Lockheed Martin, is set to benefit.
Despite a drop in sales this past quarter, Lockheed’s future looks much brighter. For one thing, congress disagreeing on a defense budget resulted in flat spending for the quarter. With this in mind, over 70% of LMTs revenue comes from the U.S government.
On top of this, supply chain issues are driving costs up, affecting the timing of contracts. As a result, Lockheed missed out on about $325M in sales on its F-35 program.
However, the new spending bill expects to fund several LMT programs. The company expects to come to an agreement with the U.S government in Q3, which can boost sales.
Lastly, defense spending steadily grows regardless of the economy. For this reason, Lockheed Martin sees steady cash flow leading to generous stock buybacks and dividend programs to help you build long-term wealth.
No. 4 Merck & Co (NYSE: MRK)
- Industry: Healthcare
- Annual Revenue: $48B
Merck is a global pharmaceutical leader. The company is best known for its prescriptions, vaccines, and animal health products.
The majority of Merck’s business is in the U.S (46%). But the company has a growing presence in Europe, the Middle East, and Africa (27%). And finally, China accounts for about 9% of Merck’s sales.
Merck’s largest revenue driver, Keytruda, grew 24% in the first quarter. Sales for Keytruda alone reached $4.8B. Moreover, sales of the company’s HPV vaccine, Gardasil, soared by nearly 60%.
Furthermore, Merck’s animal health segment continues to see higher demand, with 4% growth in Q1. The company is in a solid position to carry the momentum this year with expanding access to Lagevrio, its Covid-19 treatment.
No. 3 Apple (NASDAQ: AAPL)
- Industry: Consumer Tech
- Annual Revenue: $365B
The “underdog” is now the top dog after winning the hearts of consumers globally. Apple products remain in hot demand despite rising inflation.
In fact, Apple reached a new quarterly revenue record in March with over $97B in sales. The tech giant continues defying the odds with a dominant brand and strong consumer ties.
For instance, iPhone revenue reached over $50B, a new quarterly revenue despite supply chain challenges. Not only that, but the active iPhone active base also hit a new ATH in all geographies.
The performance shows Apple’s strength during challenging times. If you are looking for good stocks to invest in for growth, Apple has the recipe for success. For one thing, the demand for Apple products is unrivaled.
Meanwhile, the company is mastering the art of cross-selling. Apple is driving up its recurring revenue by offering software bundles and trials with hardware purchases.
Services hit a record in subscription growth over the last year and does not look to be slowing anytime soon.
No. 2 Microsoft (NASDAQ: MSFT)
- Industry: Tech (Software)
- Annual Revenue: $192B
Microsoft has made a few aggressive moves over the past few years to grow its market potential. For example, Microsoft cloud revenue grew 32% YOY in the first quarter, reaching $23B.
Yet this is only the start. Sales from all Microsoft products and services categories grew from last year. Though cloud services led the way, Office Products, Windows, Gaming, LinkedIn, and Search brought in more sales.
With a strong brand presence in rapidly growing industries such as gaming (Xbox), social media (LinkedIn), and cloud services (Azure), Microsoft is well-positioned to extend its growth streak.
Not to mention Microsoft’s bulletproof balance sheet gives it a safety net for worst-case scenarios.
No. 1 Alphabet (NASDAQ: GOOGL)
- Industry: Search
- Annual Revenue: $270B
Google shares are trending after the company’s 20-for-1 stock split. Though the split doesn’t change the company’s value, it can appeal to a wider range of investors.
Meanwhile, Google is maintaining its title as the world’s largest search engine. And the competition isn’t even close. For example, new research shows that Google’s market share has remained steadily above 80% for the past decade.
For this reason, Google generates the most ad revenue, a powerful recurring revenue source. To illustrate, Google’s ad revenue alone grew another 23% after an explosive performance last year.
Like Microsoft, Google is also taking advantage of the growing demand for cloud services. Google cloud revenue skyrocketed 45% from last year.
With strong cash flow, Alphabet can invest in its core businesses, driving away the competition. For instance, Google-owned YouTube is introducing “Shorts.” With this in mind, the video platform is looking to compete with TikTok.
The investments are paying off so far. YouTube Shorts has over 30B daily views, quadrupled from last year.
Though spending on advertising may slow during a recession, the company can overcome it with growth in other categories such as Google Cloud and other new projects.
How to Find Good Stocks to Invest in for Growth
Looking back at past stock market leaders, they share a few things. For one thing, they are distinct market leaders.
Furthermore, stocks that see the highest returns in the long run continually invest in the business. Not only that, but the investments earn a return for the company and shareholders.
The companies listed above are good stocks to invest in for growth with dominant market positions and brand names. At the same time, consumers are willing to pay for quality. For this reason, the companies above see high demand regardless of the economy. If long-term growth is your goal, these companies should be on the top of your watchlist this year.
About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.