Increasing your earned income is the best way to retire sooner. You can put money into the stock market, but being able to contribute more money to your portfolio each month will speed your path to success.
However, it isn’t just about making more money. You also have to invest in long-term assets that grow over time. Spending money frivolously or investing in high-risk investments that go bust can set you back on your goals. You don’t have to take big risks if you regularly invest and set realistic, challenging long-term goals.
Long-term stocks have competitive moats and continue to gain market share. These companies post rising revenue and profit margins, and they have established records. Buying and holding long-term stocks allows you to focus more time on your career and other things while spending less time in your portfolio. It’s a win-win if you pick the right investments. These are the best long-term stocks with a chance to deliver higher returns for their investors.
Texas Roadhouse (TXRH)
Texas Roadhouse (NASDAQ:TXRH) is a leading steakhouse restaurant chain that has an attractive valuation and growth prospects. The stock trades at a 34 P/E ratio and offers a 1.47% yield. Shares are up by 40% year-to-date and have more than tripled over the past five years.
Second quarter results indicated that revenue increased by 14.5% YOY. The company continues to open more restaurants while giving franchises the resources they need to succeed. Comparable sales at company-owned restaurants increased by 9.3% YOY while franchise restaurants had an 8.3% YOY increase in comparable sales.
Jerry Morgan, CEO of Texas Roadhouse, cited relief on commodity inflation plus strong traffic trends for higher profits. Wall Street analysts like what they see and have rated the stock as a moderate buy. The average price target implies a 6% upside from current levels. The highest price target of $191 per share suggests that the stock can gain an additional 14%.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is the online advertising leader that continues to delight investors. Shares are up by 15% YTD and have gained 170% over the past five years. The stock trades at a reasonable 23 P/E ratio and offers a 0.50% yield.
The company’s second quarter results indicate that ad revenue is accelerating. Overall revenue was up by 14% YOY in the quarter. Google Cloud also propelled the stock, as that segment grew by 29% YOY. Cloud computing now makes up more than 10% of Alphabet’s total revenue. Investments in artificial intelligence can help Alphabet diversify its revenue streams and capitalize on new opportunities.
The stock looks more attractive during this correction. Shares are down by more than 15% from their peak. A lower stock price raises the yield and increases an investor’s margin of safety. Alphabet looks poised to dominate online advertising and cloud computing for many years, making it a long-term stock worth considering.
CommVault Systems (CVLT)
CommVault Systems (NASDAQ:CVLT) is a cloud security firm that has been reporting accelerating revenue growth for several quarters. That’s because the company is focusing more of its efforts on annual subscriptions.
Recurring revenue came to $124.1 million in the first quarter of fiscal 2025. That’s up by 28% YOY and made up more than half of total revenue. Meanwhile, the company’s $224.7 million in total revenue was up by 13% YOY. As subscription revenue makes up a higher percentage of total revenue, CommVault Systems should see its growth accelerate. The cybersecurity stock is also profitable, netting $18.5 million in the first quarter.
The stock has been soaring in recent months. Shares are up by 84% YTD and have more than tripled over the past five years. The firm trades at a 37 P/E ratio and has rising profit margins. CommVault Systems’ total annual recurring revenue currently stands at $803 million.
On this date of publication, Marc Guberti held long positions in TXRH, GOOG, and CVLT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.