Two Outstanding Shares to Hold for the Next Two Decades
Investing with a long-term mindset is crucial, and focusing on companies in strong, everlasting industries is essential. Two such areas that I'm drawn to are technology and groceries. These sectors are fundamental to modern life and show no signs of disappearing in the foreseeable future.
Tech Stocks: Microsoft
When it comes to tech stocks, Microsoft (MSFT) is a solid choice for long-term investors. Its diversified business model and presence in various fields, including gaming, AI, and the cloud, make it hard to miss out on its growth potential. Its five-year return of around 160% is a testament to its success and the confidence investors have in its future.
Microsoft consistently delivers strong financial performance, which provides a solid foundation for long-term growth. In its fiscal 2024, Microsoft reported a 16% increase in revenue, a 24% jump in operating income, and a 22% hike in net income. Between 2020 and 2024, the revenue expanded from $143 billion to $245 billion.
The company's 2025 outlook also looks promising. Microsoft's first quarter of fiscal 2025 saw a 16% increase in revenue and an 11% increase in net income, setting the stage for continued growth.
What I appreciate about Microsoft is the range of its product offerings, which cater to multiple business segments. Its financials are generated from Microsoft Cloud, AI, Microsoft 365, LinkedIn, servers and associated products, Windows OEM, and search and advertising revenue, as well as gaming and related services. Microsoft's impressive revenue increase by 61% in the gaming sector in recent quarters can serve as an excellent example of the company's adaptability and growth potential.
Even after a series of impressive quarters, Microsoft's forward P/E ratio of only 33 times earnings seems reasonable as compared to the high premiums tech stocks are demanding. This is because of its deep presence in various business segments, which gives investors confidence in its ability to generate profits even during periods of market volatility.
Groceries: Walmart
Another long-term investment option is Walmart (WMT). Despite being a more traditional store, it continuously proves to be a reliable performer. Regardless of occasional off quarters, Walmart has managed to stay strong in the long run, making it a valuable choice for long-term investors.
Walmart not only excels in its traditional brick-and-mortar business, but it also offers online ordering and pickup options, making it a versatile retailer that can satisfy various customer preferences. Its stock has performed remarkably well in the past five years, posting a gain of approximately 72%, nearly doubling that of the S&P 500.
Walmart's third quarter of fiscal 2025 showed exceptional financial performance. Total revenue increased by 5.4%, while earnings per share rose by 41.1%. The company's guidance for fiscal 2025 predicts a similar adjusted earnings of $2.42 to $2.47.
In my view, a diversified business approach is what customers prefer. Walmart's extensive network of physical stores offers a solid basis for delivering goods via delivery and pickup services. This robust infrastructure enables the company to swiftly meet customer needs, positioning it for continued dominance in the retail sector over the coming years.
Overall, both Microsoft and Walmart offer compelling long-term investment opportunities in tech and grocery industries that are robust and growing. By investing in these proven performers, investors can secure a dependable financial future.
In terms of finance and investing, Microsoft's strong performance in the tech industry, with sectors like gaming, AI, and the cloud, has seen a five-year return of around 160%, making it a promising choice for long-term investors.
Similarly, in the grocery sector, Walmart's resilience and versatility, offering both traditional brick-and-mortar and online services, have resulted in a five-year stock gain of approximately 72%, demonstrating its strength as a long-term investment option.
