3 Stocks to Hold for the Next 20 Years – Motley Fool

Returns as of 12/01/2021
Returns as of 12/01/2021
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Let’s face it. While many investors say they’re long-termers, all too often they’re buying a stock with plans to sell it in a matter of months or even weeks. That’s better described as price speculation rather than investing.
On the other hand, who can blame them? If that’s how most of this volatile market’s stocks trade these days, that’s how market participants have to navigate the environment.
The thing is, there are still plenty of individual stocks you can hunker down with for the long haul. Here’s a closer look at three such names that you can comfortably tuck away for a couple of wealth-building decades.
The combustion-powered automobile engine may be a thing of the past by 2041. And, who knows? Maybe the tobacco industry will be completely wiped out within the next 20 years, or perhaps the paper industry will finally fade away. Long-term investors have to consider all the challenges their holdings might face in the future based on the hints they’re being given now.
If there’s one thing it’s incredibly unlikely the world will stop doing within the next two decades, though, it’s using the internet. Indeed, odds are good that people will be using the web more and more as time marches on.
Enter Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG), parent to search engine giant Google. Google not only handles nearly 92% of the internet’s search queries, according to GlobalStats’ traffic tracking, but Internet Live Stats also reports that the number of Google searches grew by 22% in 2020, bringing the annual total number of queries to nearly 3 trillion. Look for that number of searches (each one of which represents a revenue opportunity) to continue to increase as more and more people gain access to connected devices.
Image source: Getty Images.
It’s not just Alphabet’s search engine that’s a force to be reckoned with, though. Google software powers the technology that now helps handle most of these searches. That’s the Android operating system, designed from the ground up with mobile devices in mind.
GlobalStats says Android is found on 40% of all connected devices on the planet, and 71% of the world’s web-connected mobile phones. The company is relatively shy about sharing the specifics, but it did acknowledge that the bulk of last year’s $6.0 billion increase in search-based revenue stemmed from the ongoing growth in its mobile user base.
In short, Alphabet’s not only going to be around for a while, but it’s going to dominate the web-search landscape for a while, even as the search market continues to shift away from desktops and towards mobile and embedded devices.
While much of the recent rhetoric implies that brick-and-mortar retailing is dying, that’s not actually the case. Department stores and other mall-based store chains may be fighting a losing battle, but general merchandise stores like Walmart (NYSE:WMT) — stores that are more accessibly found in neighborhoods and communities — are doing just fine.
Last year’s top line of $559 billion was a 6.7% increase on the previous year’s sales, which were up 1.9% compared to 2019. In fact, Walmart’s revenue has grown every single fiscal year for the past half-decade, and every year since the 1980s except for 2016… and much of that year’s weakness can be chalked up to unexpected fluctuations in the value of the U.S. dollar.
The point is, this company is another one that’s built to last. That’s because it’s at least as much of a service provider as it is a retailer. Its service is, of course, providing consumers with access to goods they tend to buy over and over again.
Admittedly, online competitors like Amazon (NASDAQ:AMZN) have been allowed to sneak up on an unaware Walmart. Amazon even eclipsed Walmart in terms of total revenue earlier this year, according to numbers crunched by the New York Times. This gap’s continued to widen in the meantime too, boding poorly for the established brick-and-mortar outfit.
Don’t worry too much about Walmart’s market share, though. While it was late to the e-commerce party, it has earmarked $14 billion to invest in things like automation and supply chain improvements that will help it maintain the double-digit growth that its online sales arm has mustered every quarter since late 2017.
Image source: Getty Images.
Finally, add Lowe’s (NYSE:LOW) to your list of stocks to hold for the next 20 years. It’s yet another household name. But that’s the idea — it’s the sort of company that consumers have made a regular part of their routine, and are not likely to replace in a hurry.
While it plays second fiddle to rival Home Depot (NYSE:HD) in terms of size, don’t let its smaller scale fool you. This home improvement retailer can hold its own when it comes to innovating new ways to compete. Case in point: Last year the company launched tool rental services aimed at contractors. It’s an opportunity that Home Depot had plugged into years earlier, and successfully leveraged into a growing slice of the contractor-oriented market.
It’s estimated that nearly half of Home Depot’s revenue is driven by building, repair, and maintenance professionals, versus only about one-fourth of Lowe’s top line the last time the company disclosed such data. Closing that gap is a multi-billion-dollar opportunity for Lowe’s.
The far bigger reason Lowe’s is a solid 20-year kind of holding, however, is the most obvious one. While people’s entertainment, apparel, and even transportation preferences might change over time, the need for nice, well-maintained housing never goes away. If anything, it simply continues to grow. Freddie Mac data suggests the United States is 3.8 million homes short of the number it actually needs, while the National Association of Realtors pegs the figure closer to 5.2 million.
Either is a problem that requires a multi-year fix, and the American population only continues to swell in the meantime. The Census Bureau predicts the current U.S. population of nearly 333 million will exceed 373 million by 2040. There’s a lot of homebuilding (and home improvement, and home maintenance) needing to be done in the meantime. Lowes stands ready to help.

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Stock Advisor launched in February of 2002. Returns as of 12/01/2021.
Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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