The S&P 500 index keeps hitting new highs, but some analysts fear a short-term correction and advise investors to take a cautious approach, so we’ve identified some long-term safer stocks that you could buy in June 2021.
Where Can I Buy Long-Term Stocks in June 2021?
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Which Long-Term Stocks to Buy in June 2021?
Here is our list of the top 10 stocks suitable for long-term investment to generate long-term gains.
1. Square (NYSE: SQ)
Square provides financial services, mobile payments, and point-of-sale services to retailers and businesses.
Square generated revenue of $5.06 billion in the first quarter, an increase of 266% from the same quarter last year. Bitcoin revenue increased to $3.5 billion, up 1,047% from Q1 2020 level. Gross profit from the Cash App was up 171% from Q1 2020 to $495 million in Q1 2021 while gross profit from Bitcoin amounted to $75 million. The increase in revenue and gross profit numbers show that the company is could be a suitable choice for long-term investment.
Square stock lost around 21% since mid-April due to the company’s significant exposure to bitcoin. However, over the past 12 months, Square’s stock gained more than 130% as it climbed from $92 to $212 per share.
2. Pinterest (NYSE: PINS)
American social networking and image sharing service Pinterest is up 200% for the past twelve months, but over the past three months lost nearly 24% from its 52-week high of $89 and is currently trading at $67.
The company posted revenue of $485 million in its first-quarter earnings report, 78% higher than the same quarter last year. It was also able to shrink its net loss from $141.2 million in Q1 2020 to $21.7 million in Q1 2021. Global Monthly Active Users jumped to 478 million, an increase of 30% from the same quarter last year.
Pinterest forecasts Q2 revenues to grow by 105% year over year, taking it closer to profitability in the coming years. It could be a good candidate for long-term investors as the company is yet to achieve explosive growth.
3. Bank of America (NYSE: BAC)
American investment bank Bank of America is up 39% this year, higher than the KBW Nasdaq Bank Index gains of 33%. The bank posted a profit of $8.1 billion and revenue of $22.9 billion in the first quarter. Its fixed-income trading revenue for the quarter also climbed to $3.3 billion, up 22% from last year. Equities revenues during the quarter jumped 10% from last year to $1.8 billion.
Analysts expect the bank to post earnings per share of $0.75 in the second quarter, which is a growth of 102% year over year. For the full year, the analysts expect earnings per share of $3.11 and revenue of $88.19 billion.
The bank’s high growth prospects could push the stock higher in the coming quarters, making it a potential long-term investment option.
4. Chevron (NYSE: CVX)
American energy company Chevron is up 28% this year while its 12-month returns are up 21.30%. The oil company maintains a healthy five-year reserve replacement ratio of 99%, suggesting it can sustain its reserves at current production levels for five years. Chevron’s new exploratory projects in the Permian Basin and Kazakhstan are likely to keep the reserve replacement ratio close to 100%. The company is largely resilient to lower oil prices and can sustain an average oil price of $40 per parallel for five years without dividend cuts, thanks to its exemplary capital discipline.
Chevron is exploring new investment avenues, such as a hydrogen business collaboration with Toyota Motor. The stock provides a dividend yield of 5% and has increased dividends for 34 years.
The growth prospects, stable financial position, and growing dividend yield make Chevron a suitable candidate for long-term investment.
5. Electronic Arts (NASDAQ: EA)
American video game company Electronic Arts is up 19% over the last year versus the broader S&P 500 index return of 41%. EA’s Q4 revenue decreased by 3% to $1.34 billion, but net bookings for FY2021 increased by 15% from last year to $6.190 billion. During the quarter, EA paid cash dividends of $0.17 per share.
The company recently acquired UK video game developer Codemasters for $1.2 billion, bringing various revenue-generating video games under the Electronic Arts umbrella. Electronic Arts also acquired mobile game developer Glu Mobile for $2.1 billion.
The recent acquisitions, coupled with great growth franchise and fundamentals, can prove to be catalysts for its future growth.
6. Sony (NYSE: SONY)
Japanese conglomerate Sony’s shares are up 46% over the last year. Revenues in FY2020 increased by 8.9% due to a significant rise in Financial Services and Game & Network Services sales. However, the Pictures segment registered a slight decrease in sales. Music, Electronic Products & Solutions, and Imaging & Sensing Solutions, all booked double-digit sales growth.
Sony beat analysts’ expectations to report above-average results. You can consider including Sony stock in your portfolio for generating long-term returns.
7. Procter & Gamble (NYSE: PG)
American consumer goods company Procter & Gamble is up 17% over the last year but down 1.47% year to date. The company beat Wall Street’s estimates after it generated revenue of $18.1 billion and earnings per share of $1.26 billion in the third quarter. Net sales grew 5% to $18.1 billion while organic revenue rose 4% during the quarter. Except for the Baby, Feminine, and Family Care segment, all segments generated positive year-over-year growth in the quarter.
The company has a well-diversified business, stable free cash flow, and 25 years of rising dividends. P&G can be a decent stock for investors looking to generate stable, long-term returns.
8. Verizon Communications (NYSE: VZ)
At its current price, American telecommunications company Verizon’s dividend yield stands at 4.5%. Its Q1 2021 earnings report showed revenue growth in its three business segments: Consumer, Business and Media. The company’s total revenue grew from $31.6 billion to $32.9 billion in Q1 2021, registering year-over-year growth of 4%.
Verizon is well-positioned to gain from the 5G upgrade cycle and is reasonably valued to grow at 11 times the expected earnings.
9. Ford Motor Company (NYSE: F)
American automaker Ford Motor is up 147% over the last year and up 77% year-to-date. The company earned a net income of $3.3 billion in the first quarter this year, up from a net loss of $2 billion in the year-ago quarter. In April, Ford recorded all-time high sales of 11,172 electric vehicles per month, a rise of 262%.
The global chip shortage is likely to create roadblocks for Ford because it has many new products in the pipeline. However, it is in a relatively stable position, and the stock can climb as soon as the chip shortage subsides.
10. Shopify (NYSE: SHOP)
Canadian e-commerce company Shopify gained 70% over the past 12 months while its year-to-date gains stand at 12.70%. Analysts estimate that the company will post revenue of $1.03 billion in Q2 2021, up 44% from the same quarter last year. The first-quarter merchant solutions revenue increased to $668 million while subscription solutions revenue jumped to $320.7 million, registering increases of 137% and 71% respectively. According to many analysts, Shopify’s $7 billion in cash can be used to make new acquisitions.
Although growth will likely decelerate when economies reopen and consumers switch from online to brick and mortar stores, Shopify is a growth stock that could be suitable for long-term investing.
Why Buy Long-term Stocks in June 2021?
With the S&P 500 at record highs, a correction could come sooner or later, so investors should choose long-term stocks to smooth out short-term corrections and provide long-term capital appreciation and/or dividend growth.
The Bottom Line
Buying long-term stocks can protect your portfolio from short-term market volatility while providing long-term returns in the shape of capital appreciation and dividends. Remember to diversify so that you’re not over-exposed to any particular stock, sector, or industry.