Folks seeking 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, in 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 low valuations and consistent histories of payouts.
However, in today's world, many tech stocks don't pay dividends. Instead, they often return capital to shareholders through large share repurchases. Why are stock buybacks important?
"First, all the share buyback activity provides a natural buyer in the market that keeps the price elevated," as I explain in my article, "What Is a Stock Buyback?." And second, "with less shares outstanding, the earnings divided by the average share count each goes up."
Our criteria for choosing long-term investment stocks
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. Doing so allows a company to increase its earnings and dividends on a per-share basis. Moreover, a shareholder's stake rises over time. Both of these factors can push the stock price higher.
Additionally, 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 February 13. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.
- Market value: $3.6 trillion
- Dividend yield: 0.4%
Apple (AAPL) is the $3.6 trillion maker of iPhone smartphones, Mac computers, iPads and numerous other products and services.
iPhones still represent more than half of the company's sales, but recently, services, which include the App Store, have started to increase as well. For example, in its latest fiscal year ending December 28, Apple's services revenue came in above $26 billion, or 21% of its $124.3 billion in sales. That's up from 19% the year prior.
So, this massive tech products company is slowly shedding its overreliance on the iPhone, whose models are high-priced. While this will take time, the market so far approves of this plan.
And why not? The company is generating massive amounts of free cash flow (FCF), which is the money left over after expenses to run, maintain and expand the business are covered. In its recently completed fiscal year, Apple generated strong operating cash flow of $118.3 billion, while returning over $110 billion to shareholders.
Apple pays a small dividend of 0.4%, which costs the company just $15 billion each year, or 13% of its annual operating flow.
The rest of the $95 billion "returned" to shareholders was through stock buybacks. In May 2024, Apple raised the amount it says it will spend on share repurchases to $110 billion, which represents more than 3.0% of its total market value.
That approach benefits long-term shareholders in Apple stock. First, it will raise AAPL's earnings per share over time, because there will be a lower number of outstanding shares for the income produced.
In addition, the dividend per share can rise faster than it would otherwise since the dividend payments will be spread over fewer number of shares outstanding. And shares traded in the market will be absorbed, effectively acting as a buying source that will push the blue chip stock higher.
Keep in mind that AAPL stock is not overly cheap at the moment at 32.9 times forward earnings — above its five-year average of 27, according to Morningstar.
Nevertheless, Apple remains one of the best long-term investment stocks due to its consistent and powerful cash flow, dividends and buybacks.
- Market value: $273.6 billion
- Dividend yield: 4.4%
Chevron (CVX) is an integrated energy and chemicals company with both upstream and downstream operations in the U.S. and around the world.
CVX meets the criteria for a good long-term investment as it is conservatively financed, produces good profits and pays an attractive dividend it can afford. Moreover, CVX stock is not expensive, and the company is actively buying back shares, helping to push it higher.
For example, analysts expect Chevron to make $10.43 per share in fiscal 2025, which has the energy stock trading at 14.8 times forward earnings. This is just below the five-year average of 13.7 times.
Moreover, Chevron has 37 years of annual dividend hikes under its belt, because, despite vicissitudes in the prices of oil and gas and chemical industry cycles, the company has consistently produced large amounts of free cash flow.
For example, in fiscal 2024, Chevron generated $30.3 billion in operating cash flow before working capital changes and $15 billion in free cash flow. The company spent $11.8 billion on dividends and $15.2 billion on share buybacks, for $27 billion in total shareholder returns.
These figures show how Chevron manages a fair balance between investing in the future and rewarding shareholders with its cash flow. And it underscores why CVX is the kind of stock that long-term investors want to have in their portfolio.
- Market value: $3.05 trillion
- Dividend yield: 0.8%
Microsoft (MSFT) operates in every key software arena: operating systems, cloud, gaming, application software, and, even more notably these days, artificial intelligence (AI) with its Copilot chatbot and massive investment in OpenAI.
MSFT meets all the necessary qualities for being one of the best long-term investment stocks as it has consistent earnings, is conservatively financed and generates large amounts of free cash flow. Moreover, it pays a dividend and spends most of its FCF on share buybacks.
Just like Apple, however, MSFT stock is not necessarily cheap on a relative or even historical basis. For example, Microsoft is trading at 31.2 times forward earnings, which is above its five-year average of 29.9.
Still, long-term investors are likely to do quite well with MSFT. The reasons are quite simple: The company's massive cash flow, its products' ubiquity and acceptance and its shareholder rewards all work in the stock's favor.
More importantly, the company has plenty of room to increase its shareholder-friendly initiatives over time. That's because it spends just about half its free cash flow on dividends and buybacks. It plows the rest back into the company, reducing debt and making investments and acquisitions.
So, in the long run, Microsoft shareholders can expect the company to typically grow profits and cash flow, while consistently hiking its dividends and buybacks. In fact, Microsoft has had 20 consecutive years of raising its dividend. That alone, not counting its buybacks and earnings power, makes the Dow Jones stock worthy of holding as a long-term investment.
- Market value: $147.9 billion
- Dividend yield: 1.3%
Charles Schwab (SCHW) is a well-known discount brokerage firm and investment banking company with which many folks are familiar.
SCHW meets all the best criteria for a long-term investment value strategy. For example, it is conservatively financed and pays a consistent dividend.
As for that dividend, Schwab has had 35 years of consistently paying its dividend each year. That is well over the 10-year average of the median in its sector.
Moreover, Schwab's most recent return on equity was 18% in the fourth quarter ending December 31, 2024, up six percentage points from a year ago, indicating steadiness in its earnings power.
UBS Global Research analyst Brennan Hawken has a Buy rating on the financial stock . Hawken says that "SCHW is well-positioned for consistent net-interest-margin expansion as they pay-down wholesale funding over the coming quarters," and the analyst's "conviction in the company's organic growth profile remains high.
- Market value: $118.2 billion
- Dividend yield: 3.0%
Medtronic (MDT) is an almost $120 billion medical device and therapies company that originally invented the pacemaker. Moreover, the company is extremely profitable, which allows it to pay generous dividends and do large share buybacks.
Right now, MDT stock has a 3.0% dividend yield that will likely continue to rise, given the company has reliably raised its dividend for 47 straight years, including a 1.4% hike in May.
Moreover, in the six months ending on October 25, Medtronic bought back $2.8 billion of its own shares. That works out to be a small portion of its market value, but every little bit helps towards allowing the company to keep raising its dividend.
In addition, at just 15.8 times forward earnings, the stock is inexpensive. This is well below MDT's five-year average of 17.5 times, according to Morningstar.
Meanwhile, Medtronic has about $28 billion in net debt on its balance sheet, which is less than its $48.2 billion in shareholders' equity. The company's cash flow should continue to recover from supply chain issues we've seen in the past few years, allowing Medtronic to reduce its debt reliance over time.
And given its powerful cash flow and shareholder returns, MDT is one of the best long-term investment stocks.
- Market value: $222.2 billion
- Dividend yield: 2.3%
McDonald's (MCD) is a company that just about every investor knows well. But few realize that it's actually quite a good long-term investment stock to buy because it generates large amounts of free cash flow. For example, in the last 12 months (LTM) ending December 31, MCD produced $6.7 billion in FCF. That represents 3% of its $222 billion market capitalization.
MCD uses its free cash flow to pay a very ample dividend, which now yields 2.3%, and buy back stock. In all of 2024, the company paid out $7.7 billion across these shareholder-friendly initiatives.
While some folks might not like MCD's quick-service restaurant food, plenty of others do. They love its menu, buy McDonald's fries and hamburgers and generally can't get enough of its food.
Moreover, it is conservatively financed as its $38 billion in long-term debt, $32 billion after cash, is well-managed by the company's ongoing FCF generation. In addition, shareholders have benefited from its history of annually raising its dividend over the past 48 years.
Along with its buybacks, MCD stock is attractively valued. For example, it trades for just 24.9 times earnings. While certainly not cheap, it is a tad below the five-year average of 25.0.
The bottom line: Everyone is "lovin" MCD stock for the long term.
- Market value: $401.0 billion
- Dividend yield: 2.4%
Procter & Gamble (PG) is an approximately $400 billion consumer products giant with many iconic brand names – including Downy detergent, Mr. Clean cleaning supplies and Head & Shoulders shampoo – that produce large amounts of cash flow for the company.
Most everyone knows Procter & Gamble's brands and is familiar with their solid reputations. But few realize how incredibly profitable the company actually is and why PG is one of the best long-term investment stocks to buy.
For example, in the three months ending December 31, PG generated $4.8 billion in operating cash and, after $925 million in capex spending, $3.9 billion in free cash flow.
The FCF represents a massive 17.8% of P&G's $21.9 billion in quarterly sales, which is a very high free cash flow margin for a consumer products company. In fact, some software companies don't even make those kinds of margins.
Moreover, this FCF also funds massive dividends and buybacks for shareholders. The company has raised its dividend annually for the past 68 years. Moreover, management said it expects to buy back $6 billion to $7 billion in stock this fiscal year. That represents about 1.76% of its current market capitalization.
Nevertheless, PG is a little pricey at the moment relative to its historical valuation. It trades for 24.7 times earnings, which is slightly above its five-year average of 23.9.
Still, Procter & Gamble generates large amounts of cash flow from its brands and is working diligently to return value to shareholders. That makes it one of the best long-term investments value buyers can make.
- Market value: $299.0 billion
- Dividend yield: 2.8%
Coca-Cola (KO) is an iconic beverage company that generates large amounts of cash flow for its shareholders with its well-known brands such as Coke, Diet Coke, Fanta, Powerade and Minute Maid.
That makes it one of the best long-term investments a value buyer can make – just ask Warren Buffett, whose Berkshire Hathaway (BRK.B) holding company is KO's top shareholder. What makes KO so attractive is that it’s one of the best dividend stocks on Wall Street, having increased its payouts consistently for the last 62 years straight. Most recently, Coca-Cola hiked its dividend by 5.4% in February 2025.
Today, KO stock yields an attractive 2.8%, and investors can expect the dividend payout to keep increasing.
On top of that, Coca-Cola has a strong stock buyback program. For example, in 2024, it spent $1.1 million on share repurchases. That represents 0.4% of its current market value.
KO's dividends and share buybacks are more than covered by the $4.7 billion in free cash flow the company generated in 2024.
So, for the long-term investor, this consumer staples stock looks like a good investment, given its strong cash flows and shareholder-friendly initiatives.
