Investing in equities can be rewarding if it is paired with discipline and research. As Peter Lynch points out, “stocks aren’t lottery tickets. Behind every stock is a company. If the company does well, over time the stocks do well.” The idea is to buy and hold stocks of high-quality businesses.
Starting early is often another important factor for success. Warren Buffett purchased his first stock at the age of 11. Peter Lynch “started caddying at 11.” However, these are exceptional cases in the world of investing. This article intends to discuss quality stocks for investors who are 30 and older.
Before building a portfolio, investors need to clearly define the objectives. An obvious goal is to generate returns from stocks that beat inflation. This helps in boosting purchasing power. Also, when looking at stocks for investors over 30, a big objective is often retirement planning.
The focus is therefore on non-speculative stocks that investors can hold for years. I would ideally look at a portfolio that has a mix of dividend stocks and growth stocks.
Dividend stocks will lower the portfolio beta and provide regular cash flows. Starting early will allow investors to plough back these cash flows into stocks. Growth stocks, over time, can potentially become blue-chip stocks. These are the stocks that will magnify portfolio returns.
Let’s dive into these seven stocks for investors over 30.
Stocks for Investors Over 30: Apple (AAPL)
I would recommend Apple (NASDAQ:AAPL) stock for any long-term portfolio. There are several reasons to remain invested in this tech innovator.
First and foremost, Apple’s core business is a cash-flow machine. In the years to come, investors will benefit from dividend growth and share repurchases. Just for Q3 2022, the company returned $28 billion to shareholders.
Furthermore, Apple is spreading its wings. Segments like wearables and services have witnessed strong growth. With a robust cash buffer, Apple also plans entry into electric vehicles (EVs). In the next few years, there will be multiple segments that contribute to free cash flows.
It’s also worth noting that Apple has made acquisitions worth $28.51 billion over the years. Acquisitions have also ensured that the company maintains an innovation edge.
From a valuation perspective, AAPL stock trades at a forward price-to-earnings (P/E) ratio of 26.5. Valuations are attractive, and the stock is likely to be a long-term value creator.
Chevron Corporation (CVX)
Chevron (NYSE:CVX) stock is among Warren Buffett’s top holdings. Even after a rally of 67% in the last 12 months, the 3.6% dividend yield looks attractive for fresh exposure.
Goldman Sachs commodity analyst Jeff Currie recently opined that food and energy prices will trend higher in the coming quarters. If this holds true, CVX stock is likely to rally further.
From a long-term perspective, Chevron is attractive considering the company’s low break-even assets. Considering current oil prices, Chevron is positioned to report operating cash flow (OCF) in excess of $30 billion for 2022.
Further, Chevron also expects to invest $15 to $17 billion annually over the next few years. This will ensure steady production and a healthy reserves replacement ratio.
The company also has a strong balance sheet with a net-debt ratio of 10.8%. This provides ample room for aggressive investments and potential acquisitions. Overall, CVX stock looks positioned to reward investors through upside and robust dividends in the coming years.
Stocks for Investors Over 30: Tesla (TSLA)
The EV segment is likely to remain a key investment theme in coming years. Various countries have ambitious targets in terms of EV adoption. Tesla (NASDAQ:TSLA) is one of the best investment picks from the EV sector for the next decade. The company is likely to maintain its leadership position even with increasing competition.
A big reason to like Tesla is the company’s ability to generate robust cash flows with operating leverage. For the first half of 2022, Tesla reported operating cash flow of $6.3 billion. This implies an annualized OCF potential of $12.6 billion. As healthy cash flows continue, Tesla will be positioned to make big investments in product development and manufacturing.
In terms of growth, the company’s is considering building another Gigafactory in Indonesia. In the next few years, an investment in India also seems to be on the cards. The best part of growth from the European Gigafactory is still to come.
Tesla also has a lineup of new vehicles that include the Cybertruck, Roadster and Tesla Semi. Overall, there is clear growth and cash flow upside. The correction for year-to-date 2022 therefore presents a good opportunity for investment in TSLA stock.
I am also including Pfizer (NYSE:PFE) in my list of stocks for investors over 30. A big reason is that PFE stock trades at a forward P/E of 7.5. Additionally, the stock offers an attractive dividend yield of 3.3%. Considering the valuations, there is ample room for upside besides regular cash flows for investors.
I also believe that Pfizer is positioned for steady growth and cash flow upside in the coming decade. It’s worth noting that as of August 2022, Pfizer has a product pipeline of 104 drug candidates. As these drugs are commercialized, there is ample room for growth.
Pfizer has also been active on the acquisition front. This has deepened the company’s product pipeline. In 2021, Pfizer generated $29.9 billion in free cash flows. With a strong cash buffer, significant investments in research and further acquisitions seem likely.
Amid economic uncertainties, it makes sense to hold a low-beta stock like Pfizer in your portfolio. Also, the company’s growth is largely immune from economic shocks.
Stocks for Investors Over 30: Rivian (RIVN)
Among growth stocks, I am bullish on Rivian (NASDAQ:RIVN) for multi-fold returns potential. In May 2022, RIVN stock had slipped to lows of $19.30. Since then, the stock has trended significantly higher. I believe that the uptrend is likely to sustain.
For Q2 2022, Rivian produced and delivered 4,401 and 4,467 vehicles, respectively. Further, the company has reaffirmed guidance for production of 25,000 vehicles in 2022.
The key point here is that the company is still at an early growth stage. Rivian will be ramping up production capacity to 600,000 vehicles at its plants. Once deliveries accelerate, there is significant room for growth.
It’s also worth noting that Rivian reported pre-orders of 90,000 R1 vehicles as of May 2022. The initial backlog is encouraging, and as the backlog swells, RIVN stock is likely to trend higher. At some point in time, expansion beyond the U.S. is also in the cards. That’s another catalyst for growth in terms of deliveries.
Newmont Corporation (NEM)
Even with contractionary monetary policies, I remain bullish on gold for the long term. Factors like inflation, a potential recession and geo-political tensions are all positive for the precious metal.
Newmont Corporation (NYSE:NEM) stock has corrected by 35% in the last six months. This seems like a good long-term accumulation opportunity for a stock with an attractive dividend yield of 5%.
From a financial perspective, Newmont has a robust balance sheet with net-debt-to-adjusted-EBITDA of 0.3 as of Q2 2022. With a strong cash buffer and an annualized free cash flow visibility of $2 billion, there is ample room for value creation.
Newmont is also attractive considering the fact that the company has gold reserves of 96 million ounces. The reserves will help Newmont sustain production well into the 2040s.
Newmont expects to reduce all-in sustaining costs to $800 to $900 an ounce in the next few years. Even if gold trades around $2,000 an ounce, the company is positioned to deliver robust free cash flows in the coming years.
I therefore believe that Newmont will continue to create shareholder value through dividend growth and share repurchasing. Further, at current valuations, there seems to be opportunity for upside.
Stocks for Investors Over 30: Costco (COST)
For any long-term portfolio, holding one or more retail stocks makes sense. The consumption sector remains the key driving force of the U.S. economy. Retail spending happens to be a key component of consumption spending.
Recently, retail stocks have been under pressure due to inflation. However, dips provide an opportunity for long-term exposure. Costco (NASDAQ:COST) is one stock that’s worth considering.
Even with inflationary headwinds, Costco has been delivering strong results. It’s not surprising that the stock bounced back quickly after a steep correction.
For the 44 weeks ended July 3, the company reported a 16.9% increase in sales. As the company builds strong omni-channel presence, the e-commerce segment will continue to boost comparable store sales growth.
It’s also worth noting that for the last 12 months, Costco reported $4.1 billion in membership fee revenue. With a strong renewal rate and sustained growth in cardholders, recurring income will continue to swell.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.