There are thousands of publicly traded companies out there. How do you choose which stock to buy?
Investors looking at the long-term horizon are positioned to profit the most. Daytrading is a losing proposition for the vast majority of people who undertake it. It’s almost impossible to predict a short-term trend. Predicting a long-term trend can be done with relative ease, however.
Buying and holding for the long-term means you want to find companies that have great long-term growth potential and are currently undervalued. On top of that, stocks that pay a nice quarterly dividend help increase your long-term earnings by providing passive income.
Let’s look at a few large-cap stocks that fit the bill.
AT&T
AT&T (T) is one of the largest telecommunications companies in the world. They have been involved in a steady stream of mergers and acquisitions in recent years, swallowing up large competitors like T-Mobile and Time Warner.
On September 9th, 2019, activist investor group Elliot Management announced a $3.2 billion stake in the company. In a letter to the board of AT&T, Elliot detailed a long list of hopeful aspirations for and scathing criticisms against the company.
Elliot Management believes shares of T could rise as high as $65 in the next several years, up from its recent trading price of around $38. That said, in its letter to the board, there was a long list of things the company needs to improve upon in order to meet that share price increase, from better management to making wiser decisions with regards to acquisitions.
The company has increased its dividend yield every single year for 35 years straight as of 2018. At the time of writing, the dividend yield for T is an impressive 5.3%. For this reason alone, T is a big-time favorite among institutional investors, who hold significant stakes in the company for its regular dividend income.
Amazon
This company needs to introduction. The tech behemoth known as Amazon (AMZN) has been a huge growth stock over the last decade. With the company creating ever more shipping warehouses, seeing increasing revenues, acquiring companies like Whole Foods, and even considering getting into the pharmaceuticals business, it’s safe to say that AMZN will continue to be a good long-term bet.
Amazon doesn’t pay a dividend. But the stock has excellent growth prospects and a track record of delivering value to its shareholders.
Brookfield Asset Management
The story of Brookfield Asset Management (BAM) goes back over a century to an initial investment in electricity and transportation in Brazil. The company still remains focused on investing in infrastructure and has traditionally managed its own money while only catering to large investors. In recent times, however, the BAM has begun reaching out to smaller investors with innovative investment options.
Brookfield has been creating a long list of limited partnerships that zero in on key parts of the infrastructure space. These include ventures like Brookfield Infrastructure Partners, Brookfield Renewable Partners, Brookfield Property Partners, and Brookfield Business Partners. Each of these smaller partnerships has its own specialized focus in the infrastructure market.
Investing in BAM has done investors well over the past decade, as the stock has outperformed the broader market by a wide margin. The stock pays a small dividend of about 1.2%, but its real value to shareholders comes in the form of its partnerships and steady price appreciation.
All things considered, these are three of the best stocks to invest right now. Choose wisely and remember that the choice is up to you depending on your personal investor profile.