Best Long-Term Investment Stocks to Buy

Some of the best long-term investment stocks include companies that are in good financial standing, have a low valuation and pay consistent dividends.

hourglass with black sand sitting on top of dollar bills
(Image credit: Getty Images)

Folks seeking out the best long-term investment stocks to buy have a few ways to approach the task. One is to follow the advice of Benjamin Graham, the father of value investing, using his classic book, The Intelligent Investor.

In what is arguably one of the best books on investing, Graham suggests that a defensive investor should buy stocks of large, conservatively financed companies with good earnings power. The companies should also be some of the best dividend stocks, with consistent histories of payouts, and have low valuations.

However, in today's world, many tech stocks don't pay dividends. Instead, they often return capital to shareholders through large stock buybacks.

Therefore, applying Graham's criteria today, the idea is to find the best stocks to buy that return large amounts of capital to shareholders either through dividends and/or stock buybacks.

This allows a company to increase its earnings and dividends on a per-share basis. Moreover, the remaining shareholder's stakes rise over time. Both of these factors can push the stock higher.

Another Graham criteria is to find stocks with a low valuation. The S&P 500 has a relatively high price-to-earnings (P/E) ratio of 31.4 times over the last 10 years. This article will focus on stocks with price-to-earnings ratios that are lower than the broad market.

Lastly, we will stick with stocks that have market caps of $100 billion or higher. They must also have low debt ratios and enough cash flow to reduce their debt, as well as pay dividends and/or buybacks.

With this in mind, here are the nine of the best long-term investment stocks to buy now. 

Data is as of November 29. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. 

Mark R. Hake, CFA
Contributing writer, Kiplinger

Mark R. Hake, CFA, is a Chartered Financial Analyst and entrepreneur. He has been writing on stocks for over six years and has also owned his own investment management and research firms focused on U.S. and international value stocks, for over 10 years. In addition, he worked on the buy side for investment firms, hedge funds, and investment divisions of insurance companies for the past 36 years. Lately, he is also working as Chief Strategy Officer for a tech start-up company, Foldstar Inc, based in Princeton, New Jersey.