3 Must-Have Stocks To Supercharge Your Long-Term Portfolio

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Investing isn’t just about the thrill of high-risk, high-reward plays or outsmarting the financial system. It’s also about strategically positioning oneself for stable, long-term growth. Enter Gordon Pape’s Internet Wealth Builder Buy and Hold Portfolio, an astute mix of U.S. and Canadian stocks designed to withstand market volatility while delivering consistent returns. Highlighted in his June 25 column in The Globe and Mail, Pape’s portfolio is a beacon for investors aiming for resilient, dividend-paying stocks. Let’s dive into the key players in this portfolio and why they deserve your attention.

Gordon Pape is a name synonymous with personal finance and investing in Canada. As one of the longest-serving authors in the field, Pape has written numerous books, newsletters, and columns that educate and guide investors. Since its inception in June 2012, his Internet Wealth Builder Buy and Hold Portfolio has served as a strategic blend of U.S. and Canadian stocks. The selection criteria are stringent: superior long-term growth profiles, industry leadership, strong balance sheets, a history of dividend increases, and resilience in down markets. The overarching goal? To generate decent cash flow, minimize downside potential, and ensure slow but steady growth, targeting an annual return of 8%.

Editor's Note: Analysis and insight for this article were originally sourced from our friends at InvestorPlace

UnitedHealth Group, the largest health insurer in the U.S., commands a substantial 16% market share, towering over its competition. This makes it a vital part of the healthcare landscape. Recently, UNH faced a notable challenge. A cyberattack on its claims processing unit, Change Healthcare, led to a significant financial hit, totaling up to $1.6 billion for 2024. However, despite this setback, UnitedHealth Group’s robust fundamentals have ensured that its long-term outlook remains bullish. Projected to achieve a staggering $26 billion in annual adjusted net earnings, the insurer’s market dominance and critical role within the U.S. healthcare system make it a compelling choice for those seeking a mix of reliability and growth potential.

The decline in UNH‘s stock, down over 9% in 2024, can be attributed to the attack and the subsequent possible class action lawsuit. While class action lawsuits are commonplace in the U.S., they do cast a shadow over firms handling sensitive data. Nevertheless, the company’s vast market share and projected financial health affirm its status as a solid investment. A brick in Pape’s portfolio, UnitedHealth demonstrates the strategic foresight in picking stocks resilient enough to weather short-term storms.

Analyst Ratings for UnitedHealth Group (UNH):

Summary of Analysts’ Outlook:
Analysts are generally optimistic about UnitedHealth Group (UNH). The stock has a consensus rating of Strong Buy based on price targets from multiple firms. The average price target, which reflects the expected future stock price, is around $560.51. This suggests a significant potential gain of 15.66% if the stock reaches the average price target. The current stock price is $488.89, providing an indication of room for growth.

Moving into the retail sector, we find Walmart, the unchallenged titan of global retail. Walmart’s brand is synonymous with scale, and its ability to adapt is noteworthy. Its foray into digital advertising and e-commerce is not just promising but transformative. This pivot is a driving factor behind its optimistic profitability projections. Analysts are overwhelmingly bullish on Walmart, with 32 out of 38 rating it a “buy.” Walmart’s stock might appear overvalued to some, but the market’s confidence, reflected in target prices about 8% above current trading levels, speaks volumes.

In May, BofA Securities raised its target for Walmart by $8 to $75, highlighting the potential of its digital advertising business to bolster long-term profitability. The decision underscores Walmart’s knack for leveraging its scale and exploring new revenue avenues. For those worried about economic downturns, Walmart’s resilience offers a welcome shelter. Investors are willing to pay a premium for the quality and steady performance Walmart delivers, validating its place in a well-rounded portfolio.

Analyst Ratings for Walmart (WMT):

Summary of Analysts’ Outlook:
Analysts are generally bullish on Walmart (WMT), with a strong buy consensus. The average price target suggests a potential gain of 8.76% from the current price. Key highlights include:

• Analyst Recommendation: 66% Buy, 5% Hold, 0% Sell.
• Price Targets: The highest analyst price target is $81.00, and the lowest is $64.00. The average price target is $72.54.
• Earnings Estimates: Next quarter’s earnings estimate is $0.65 with a range from $0.62 to $0.69. The average current-year earnings estimate is $2.43 with a range from $2.35 to $2.72.
• Sales Estimates: Next quarter’s total sales forecast is $168.61B with a range from $167.45B to $169.50B. The current-year sales estimate is $2.43T with a range from $2.35T to $2.72T.

Next, we pivot to Brookfield Corporation, a powerhouse in the realm of alternative assets. Brookfield’s track record speaks volumes; it’s a company built on strategic growth and shareholder value. Accounting for 12.7% of Pape’s portfolio, its significance is clear. The recent spin-off of its asset management division to create Brookfield Asset Management is a testament to its strategic prowess. Additionally, Brookfield’s opportunistic investments, such as its involvement in the potential take-private deal of Grifols SA, highlight its dynamic approach. With an eye for creating shareholder value and navigating complex deals, Brookfield remains a top pick for those looking to combine stability with strategic growth.

Brookfield’s history of opportunistic investments, including the take-private deal for Grifols SA, exemplifies its ability to navigate complex financial landscapes. The 345% cumulative gain since Pape added it to the portfolio underscores its lucrative potential. Brookfield’s diversified asset-light, fee-generating business model, post spin-off, empowers it to sustainably generate value for its shareholders, making it an exemplary pick in Pape’s portfolio.

Analyst Ratings for Brookfield Corporation (BN):

Summary of Analysts’ Outlook:
Analysts are largely optimistic about Brookfield Corporation (BN), with a consensus rating of Strong Buy. The average price target is $49.50, suggesting a potential gain of approximately 19.16%. Both its strategic investments and the ability to generate stable, fee-based revenue underscore its appeal as a long-term hold.

Pape’s portfolio isn’t just a random assortment of stocks; it’s a carefully curated collection designed to weather financial storms. UnitedHealth Group, Walmart, and Brookfield Corporation symbolize the quintessence of Pape’s buy-and-hold strategy. Each of these stocks embodies stability, offering dividends and strong market footprints while providing the promise of future growth.

For savvy investors, diving into Pape’s portfolio offers a blueprint for steady, reliable returns. With a target annual return of 8%, it’s an investment strategy crafted for those who value both security and growth. So if you’re looking to build a resilient financial future, these stocks, backed by Pape’s insightful analysis, should be on your radar. By understanding and leveraging these opportunities, you’re not just participating in the market; you’re intelligently positioning yourself to outperform it. Dive headfirst into this strategy and watch your investments flourish.