2 top stocks I'd buy and hold for the next decade
Finding shares which offer long-term growth potential can be tough. Even though the prospects for the world economy are relatively positive at the present time, uncertainty remains and a number of stocks may find it difficult to adapt to a changing economic outlook.
Furthermore, with stock markets having risen in recent months, valuations may now be less appealing than they were previously. As such, obtaining a wide margin of safety may prove to be more challenging.
However, some stocks continue to offer an impressive long-term outlook. Here are two prime examples which could be worth a closer look today.
Friday saw aviation services and distribution specialist John Menzies(LSE: MNZS) release a trading update for the first four months of the year. It has experienced a positive start to the year, with the company trading ahead of the comparable period.
In its aviation division, trading has been positive, with strong cargo volumes continuing. Ground handling and fuelling volume are in line with expectations and have experienced strong contract momentum. Similarly, the distribution segment of the business has experienced relatively strong performance. It is in the process of being sold, although it is taking longer than expected. The company remains engaged with a number of potential buyers, and expects further updates in the short term.
With John Menzies forecast to post a rise in its bottom line of 4% in the current year and 7% next year, it seems to have a bright outlook. Despite this, it trades on a price-to-earnings growth (PEG) ratio of 1.6, which suggests that it could offer a wide margin of safety. As such, it could be worth a closer look for long-term investors.
Also offering an upbeat long-term future is FTSE 100 consumer goods company Burberry(LSE: BRBY). The business has experienced a difficult period which has been full of change. It has refreshed its management team and is set to deliver a new strategy that will see it focus to a greater extent on much higher-end products. This will also include a store closure programme, with capital expenditure expected to increase as it seeks to deliver a more luxurious customer experience.
With Burberry forecast to report a fall in its bottom line in the current year, investor sentiment could come under a degree of pressure. However, the company is expected to return to positive growth next year, with earnings forecast to rise by around 5%. This has the potential to boost investor sentiment in the stock, and could mean that it has further capital growth prospects following its 12% rise in the last month.
Certainly, a period of major change brings significant risk and uncertainty. But with such a strong brand and a high degree of customer loyalty, Burberry seems to be in a strong position to perform well in the long term.
Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has recommended Burberry. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.