Long-term investing has numerous advantages over day trading. Holding company shares for a while may provide peace of mind, tax benefits, and compounding. However, which companies are worth sustainable investment?
About as many candidates as stocks exist. Most firms convince investors they are good long-term investments. Not always, but let's look at two "forever" investments that'll help you sleep: UnitedHealth Group (NYSE: UNH) and Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B).
1. UnitedHealth Group UnitedHealth Group, a healthcare giant, offers many services. Optum provides primary and specialty care to patients, data and analytics to third-party payers (including government payers), hospital systems, life science enterprises, and pharmacy care services. UnitedHealth Group is a major insurer.
It's hard to argue with a corporation that services almost all healthcare stakeholders, some of whom use its products to improve their companies and patient results. The healthcare industry will change, but UnitedHealth Group's solutions are unlikely to become obsolete.
UnitedHealth Group performs well financially. Revenue rose 15% to $371.6 billion last year, a good result. Adjusted earnings per share rose 13% to $25.12. Why think UnitedHealth Group can keep doing so? One key reason: The company's vertically integrated operation and large network of physicians, patients, and other customers provide it a competitive edge.
Its name is synonymous with quality critical healthcare. UnitedHealth Group's 15% U.S. insurance market share in 2023 is partly due to that. However, Optum has driven growth more. Optum's revenue rose 24% to $226.6 billion last year. The world's aging population and rising demand for its services should benefit both divisions. The company hasn't reached a ceiling because of that. Add this stock to your portfolio for long-term gains.
2. Berkshire Berkshire Hathaway may be the everlasting stock for two reasons. First, it is a big, international conglomerate of numerous smaller enterprises in diverse areas. It owns well-known companies like GEICO, Pampered Chef, Fruit of the Loom, and others. Berkshire Hathaway is very diverse and should perform well regardless of the economy. A major competitive edge.
Second, Warren Buffett, a legendary investor, runs Berkshire Hathaway. The Oracle of Omaha is known for long-term thinking. His firm has been profitable for years because he constructed it to last. Berkshire Hathaway delivers market-beating returns to long-term stockholders. Buffett is no spring chicken, some say. The dude is 90+.
The untimely death of Buffett's longtime friend and conglomerate second-in-command Charlie Munger may have raised this concern for some investors. However, Buffett and Munger spent years building a firm and culture that should outlive them. Gregory Abel, Berkshire Hathaway's non-insurance vice chairman, will succeed Buffett.
Abel inherits a well-oiled machine from Buffett, who wouldn't hire just anyone to lead his company. Berkshire Hathaway's future is bright. With a $885 billion market cap, it should become a trillion-dollar stock in a year or two. Berkshire Hathaway will grow long afterward.
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