Despite the occasional flash of bullish brilliance, the broad market is still losing ground. This means most individual stocks are doing the same. There are a few tickers, however, shrugging off the sweeping weakness and achieving surprisingly consistent gains.
Such persistent bullishness in and of itself doesn’t make these stocks great long-term buys. Yet, three of these currently roaring stocks also happen to be names you can feel good about stepping into for the next decade or more. Let’s take a closer look at them.
Rampant inflation may be a problem for consumers, but not for food companies like General Mills (GIS 0.29%). Its stock is priced just under record highs hit earlier this week because it’s been able to pass along its higher costs to shoppers, who of course have to eat. For its fiscal year ended in May, General Mills saw comparable sales grow to the tune of 6% even as it increased by 7% the prices it charged its customers — the grocery stores that in turn sell this food to consumers.
In other words, higher prices weren’t a problem — they were the key reason the company was able to boost its top line last year.
Of course, none of this is exactly new. While the name behind popular products such as Chex cereal, Pillsbury biscuits, and Green Giant vegetables sees its top and bottom lines ebb and flow over time, it adjusts to the ebbs to create the eventual flows. Given enough time, its multi-decade history of growth is well sustained. Ditto for the stock’s price.
And it’s efforts continue. Despite challenging macro-economic conditions, General Mills is still looking for organic sales growth of between 4% and 5% for the fiscal year that just got going. Earnings growth should be slightly lower, but largely because the company is spinning off some brands, and acquiring others. Perhaps more important, this year’s per-share earnings should roll in no lower than last year’s $3.94, which is more than enough to cover the current annualized dividend of $2.16 per share.
It’s difficult enough to step into a biopharma name for 20 months, or even 20 weeks, for that matter. A 20-year holding period feels like forever in an industry that moves as quickly as this one does. Every company in this space is just one failed drug or one competitor’s success away from disaster. Ergo, if you’re making a major long-term commitment to one particular pick in this business, you have to be sure that company is not only well-positioned with a diversified drug portfolio, but also has the right tools to develop or buy new drug franchises.
United Therapeutics (UTHR 1.24%) is one of those rare companies. Most investors have probably heard of the company — and probably can’t name a single one of its products. That’s somewhat by design. Rather than jumping into highly competitive markets where myriad other biopharma outfits already operate, United Therapeutics sticks to smaller markets where it can make a relatively big splash.
Its flagship therapies Tyvaso and Remodulin are both aimed at pulmonary hypertension, which is an underserved market that should grow from 2020’s $6.6 billion to a little more than $10 billion by 2027, according to Global Market Insights. That’s big enough to matter to United Therapeutics, but not so big that it attracts a great deal of competition from pharma companies with the wherewithal to take a bite out of United Therapeutics’ reach.
That’s not necessarily what makes this ticker a 20-year holding, though. Neither is its work on human organ manufacturing, which is incredible, but far from being ready for wide use.
Most compelling here is the company’s understanding that its biotechnologies are a platform from which a variety of therapies can be built, now and into a future that includes the mainstreaming of offerings like gene therapy and the cultivation of functioning organs for use in humans. This bright future is the key reason United Therapeutics shares have performed so well of late when most other stocks haven’t.
Finally, add AutoZone (AZO 1.82%) to your list of soaring stocks that you can still buy now and hold for the next decade or longer.
Many investors may be surprised to learn this auto parts retailer’s stock is up at all for the past year, let alone a hefty 40% since this point in 2021. Fears of economic weakness are rattling consumer spending, and besides, global supply chain problems have been particularly pronounced within the auto parts arena.
That viewpoint, however, looks at the car-parts business from the wrong perspective. When supplies of needed goods are limited, any retailer that can provide the few goods that are available ends up being very well-positioned.
Not that AutoZone needed a great deal of help in this regard. In only two quarters in the past 10 years has it reported lower year-over-year quarterly sales, and one of them was the second quarter of 2020, when the pandemic prompted outright shutdowns of non-essential commerce. Operating income growth has been almost as consistent. This steady pace of progress reflects the persistent interest in taking care of cars to keep them running (and looking good) longer, which is a function of the ever-growing cost of buying an automobile in the first place.
Given that this cost and maintenance dynamic is never likely to change, there’s little reason to think auto parts retailers will ever face a major, prolonged headwind. Look for more of the same steady growth for the indefinite future, starting with this year’s projected sales growth of nearly 10% that will likely be topped by even stronger earnings growth.