Traders are usually looking for the next big thing and with good reason. Catching new trends, like AI stocks, can lead to strong near-term gains. But there’s something to be said for the top long-term stocks as well.
That’s particularly true when taking both tax efficiency and peace of mind into account. There is certainly value in buying high-quality long-term stocks with high returns. These set-and-forget sorts of names can produce outsized returns for decades at a time.
All three of these top long-term stocks have seen their share prices rise at least 8,000% over the past 40 years. And, thanks to their strong management teams and attractive business models, there should be plenty more gains to be had well into the 2020s and beyond. Here are three long-term stocks to buy on dips.
Ecolab (ECL)
Ecolab (NYSE:ECL) is the world’s largest cleaning and sanitation company. It aims to be a one-stop shop for its customers, offering cleaning supplies and chemicals, pest control, water treatment and related services.
Over the decades, Ecolab has grown through a steady diet of mergers and acquisitions, rolling up smaller cleaning and sanitation companies around the world. This strategy has been extraordinarily successful. Ecolab has been one of the best stocks for long-term investment, with shares rising over 10,000% over the past 40 years.
And there’s plenty of growth left to be had. Despite being the largest player in its industry, it still has just an 8% market share of the $152 billion global market. That means Ecolab’s M&A strategy should find fruitful targets for many more years to come.
ECL stock underperformed in recent years as many of its leading customers struggled amid the pandemic. But with the global economy now reopening and key customer segments like travel, hospitality, shopping centers and entertainment venues booming again, Ecolab stock is set to return toward its record highs.
Hormel Foods (HRL)
Hormel Foods (NYSE:HRL) is an American packaged foods company focused on meat and protein products. The company was founded in 1891 in Austin, Minnesota, and its headquarters remains there today — 132 years later.
The company originally packaged and sold meats to consumers before adding its SPAM canned pork product to the line-up in 1937. While many consumers may look down on SPAM today, Hormel has evolved with the times. It is now a leader in more nutritious and trendy products such as nuts and nut butters, organic meats, deli meats, ready-to-eat guacamole and Mexican salsas.
Hormel is a Dividend King, meaning it has raised its dividend for more than 50 years in a row. It has also been a tremendous earnings growth story, with earnings per share more than quadrupling over the past 20 years. That’s a great record for a traditionally slow-moving industry such as food.
HRL stock has been flat in recent years as the company has been hit by margin pressure and supply chain issues. However, Hormel’s latest earnings report was better as the company is starting to turn the corner on pandemic-related disruptions. Hormel should return to its usual growth trajectory, especially as it integrates its acquisition of the Planters nuts brand.
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO) is Denmark’s largest company. The pharmaceutical giant has long been a leader in the development of treatments for diabetes, and it controls roughly half of the insulin market today.
The company has recently enjoyed a second act with its GLP-1 therapies which can help patients with obesity, diabetes and cardiovascular issues; therapies include Victoza, Ozempic and Rybelsus with different treatment schedules and delivery methods. GLP-1 therapies have been a massive growth market, with Ozempic becoming a major cultural event with celebrities and mainstream publications talking about it.
Ozempic produced nearly $10 billion in 2022 revenues, and analysts see that jumping to as much as $17 billion annually by 2029. Combine that with Novo’s dominant position in other diabetes treatments and insulin products, and Novo remains an excellent long-term stock for dealing with an aging society and related issues such as diabetes and obesity.
On the date of publication, Ian Bezek held a long position in HRL, NVO, ECL stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
