Can five well-chosen companies really form the backbone of your portfolio through 2026 and beyond?
In this concise guide, you’ll find a handpicked list of stocks to buy and hold. They balance growth, income, and durability. The picks focus on companies with strong cash flow and clear competitive moats. They cover technology, healthcare, retail, payments, and energy/dividends for diversified long term investing options.
Key Takeaways
- These top stocks to hold combine growth leaders and reliable income names for balanced returns.
- Long term investing favors businesses with recurring revenue and durable competitive advantages.
- We screened for valuation, dividend coverage, and analyst consensus to select the best stocks to buy and hold.
- Portfolio resilience comes from sector diversification across tech, healthcare, retail, payments, and energy/dividends.
- Dollar-cost averaging and tax-advantaged accounts improve results for buy-and-hold strategies.
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Why a Buy and Hold Strategy Works for 2026
Choosing a buy and hold strategy means steady progress. You avoid daily market ups and downs. This lets your investments grow over time.
Benefits of long term investing
Long term investing brings steady growth and saves on costs. By not trading often, you save on taxes and fees. This means your investments in companies like Microsoft and Costco can grow more.
How market cycles and valuations create buying opportunities
Markets go through cycles, and downturns are chances to buy good stocks at lower prices. Analysts use special tools to find the best times to invest. This turns short-term doubts into long-term gains for patient investors.
Tax efficiency and compounding for buy-and-hold investors
Longer holding periods mean less tax and more after-tax returns. Reinvesting dividends from companies like Verizon boosts your growth. Choose firms with solid cash flow and reliable dividends for lasting growth.
Blend growth and income stocks to reduce risk. Look for companies with real cash flow and essential business models. This way, your strategy thrives through market ups and downs, focusing on long-term success.
How we chose these long term stock picks
We started with a clear plan to find stocks that fit your goals. We looked for financial strength, competitive advantages, and fair prices. This helps you pick stocks for the long haul, not just quick gains.
Selection criteria: valuation, growth, dividend strength, and moat
We searched for companies with strong cash flow and solid balance sheets. We wanted firms with cash flow 1.3x–2.0x their dividend payouts, low debt, and growing free cash flow. Each company had a clear path for growth or dividend payments.
We focused on durable advantages like network effects, unique technology, or membership models. We checked valuations against peers and growth forecasts. This ensured our picks were based on solid numbers, not just stories.
Industry diversification across technology, healthcare, retail, payments, and energy/dividends
Diversification reduces risk and smooths out returns. Our top picks span semiconductors, cloud software, retail, biotech, and payments. This mix balances growth with stable cash flows.
We added income-generating stocks like midstream and telecom to balance growth with stability. Examples include MPLX, Energy Transfer, Enbridge, Ares Capital, and Verizon. These stocks aim to reduce volatility while keeping upside.
Use of recent data and analyst consensus for 2026 positioning
We used 2025 financials, earnings trends, and sell-side research to guide our picks. We checked coverage ratios and updated quotes for early 2026. This ensures our picks are current and actionable for investors.
When forecasts varied, we chose conservative estimates and tested scenarios. This helps you see each stock’s long-term value and known risks.
Stock profile: Nvidia — AI leadership and long-term growth
Nvidia is a leader in GPUs and AI acceleration hardware. Its chips are used in data centers, cloud providers, and enterprise AI workloads. The company has a strong developer ecosystem and software stack, giving it a competitive edge.
Business overview and AI market position
Nvidia’s high-performance GPUs and software like CUDA make AI model training and inference faster. Cloud giants like Amazon Web Services, Microsoft Azure, and Google Cloud use Nvidia cards for AI. This widespread use makes it hard for customers to switch, strengthening Nvidia’s position.
Recent financials and earnings momentum through 2025
Revenue and earnings have grown sharply from 2023 to 2025. This growth is driven by demand for data-center GPUs and increasing software and services revenue. Margins have expanded as software sales become more consistent. Strong free cash flow supports R&D, ecosystem investments, and capital returns.
Why Nvidia fits a buy and hold strategy despite prior strong gains
Nvidia’s dominant role in the AI market supports long-term growth. Investing in Nvidia offers focused exposure to the AI theme, which can grow over time. Combining this with dividend-paying, defensive stocks can balance out volatility and improve the portfolio.
| Category | What to watch | Investor implication |
|---|---|---|
| Market position | GPU leadership, CUDA ecosystem, partnerships with AWS, Microsoft, Google | High barrier to entry; supports thesis for best stocks to buy and hold |
| Revenue drivers | Data-center GPU sales, software subscriptions, OEM and cloud contracts | Recurring revenue lifts valuation for long term investing |
| Financial health | Strong margins, rising free cash flow, continued R&D spend | Capacity to invest in growth while returning capital to shareholders |
| Risks | Competition from AMD and custom silicon from hyperscalers | Monitor product cycles and pricing pressure for stocks to buy and hold |
| Portfolio role | Growth engine with concentrated exposure to AI | Consider as core growth holding alongside income and defensive names |
Stock profile: Microsoft — diversified tech exposure with AI and cloud
Microsoft offers a wide view into tech trends without focusing on one product. It has Azure, Office 365, GitHub, and AI services for steady income. This mix makes Microsoft a solid choice for investors seeking steady growth and income.
How Microsoft gives you exposure to AI, cloud, and quantum computing
Azure is a key platform for cloud and AI workloads. Office 365 and LinkedIn provide steady subscription income. Investments in quantum and developer tools aim to keep Microsoft ahead for the next decade. Microsoft offers a broad view of innovation, making it a great pick for long-term investments.
Valuation context and forward earnings multiple
Microsoft often trades at a premium because investors value its growth and margins. Compare its forward earnings multiple to peers and consider growth rates before investing. This approach helps find good times to buy and hold Microsoft stock.
Durability of the business and income/return
Microsoft has high switching costs and strong relationships, supporting dividends and buybacks. Its balance sheet allows for reinvestment and returning capital to shareholders. This combination supports total return, making Microsoft a key choice for long-term investments.
| Factor | Why it matters | Microsoft profile |
|---|---|---|
| Revenue mix | Predictability and diversification | Cloud (Azure), productivity, LinkedIn, gaming, enterprise services |
| Growth runway | Future earnings | AI integration, hybrid cloud adoption, developer tools, quantum research |
| Valuation | Price relative to earnings | Premium forward P/E; examine vs. peers and growth outlook |
| Cash returns | Income and capital return | Dividend growth history, sizable buyback programs, strong free cash flow |
| Risk profile | Potential headwinds | Regulatory scrutiny, competition from AWS/Google Cloud, execution on new bets |
| Fit for portfolios | Role in allocation | Core growth plus moderate income; ideal for buy and hold strategy and as one of the top stocks to hold |
Stock profile: Costco — recession-resistant retail with recurring membership revenue
Costco’s warehouse model offers steady cash flow and high customer loyalty. The annual membership fees create a recurring revenue stream. This stream helps smooth out results when retail traffic drops.
Why the business model supports steady long-term earnings
Membership fees are a key profit source. They boost gross margins and let Costco price goods competitively. This keeps earnings steady. You also get repeat buyers and predictable renewal rates.
Membership economics and margin resilience in different macro environments
Costco limits SKUs and focuses on high turns per square foot. This lean assortment lowers inventory risk and helps margins in inflation or downturns. In recessions, shoppers often choose value, which favors warehouse formats.
Current valuation and reason to buy and hold into 2026
Shares often trade at a premium due to consistent growth and conservative capital allocation. Investing for the long term? Costco’s steady cash generation and low downside make it a top stock to hold in a balanced portfolio.
| Metric | Why it matters to you | Costco profile |
|---|---|---|
| Membership revenue | High-margin recurring income cushions earnings | Significant portion of operating income; strong renewal trends |
| Same-store sales | Shows customer demand and pricing power | Consistent positive comps driven by loyal base |
| Inventory turns | Higher turns mean lower carrying costs and fresher assortment | Lean SKU strategy boosts turns and margin resilience |
| Valuation premium | Reflects quality but limits near-term upside | Premium multiple justified by stable growth and cash flow |
| Risk vs reward | Assesses downside in recessionary periods | Lower downside relative to many retailers; strong membership moat |
Looking for the best stocks to buy and hold for the long term? Costco is a top pick among consumer staples. It’s a practical choice for building a balanced portfolio with growth names and income plays.
Stock profile: Vertex Pharmaceuticals — specialized biotech with durable cash flows
Vertex Pharmaceuticals is a top biotech company. It has steady cash flows from its cystic fibrosis drugs. It also has strong patents that protect its business until the late 2030s.
This combination offers a chance to invest in new science while keeping some stability in your returns.
Leadership in cystic fibrosis
Vertex leads in treating cystic fibrosis with its flagship drugs. These drugs bring in consistent, high-profit sales. The strong patents and exclusivity periods ensure these sales for years.
If you’re looking at long term stock picks, Vertex’s cystic fibrosis business is key.
Pipeline expansion and upside
Vertex has recently launched drugs like Casgevy and Journavx. These are part of its gene-editing and gene therapy programs. They could open up new markets and increase revenue.
Keep an eye on how these drugs do in the market and any new uses they might get.
Balancing growth and defense
Vertex mixes steady sales with the chance for growth from its pipeline. This mix is attractive to investors who want both growth and stability. Look at the company’s future plans, pricing, and patent issues when deciding to invest.
For long-term investing, consider Vertex for its solid cash flows and promising pipeline. Watch for trial results and new uses for its drugs to decide when to buy or hold.
Stock profile: American Express — consumer payments leader with premium customer base
American Express is a top pick for those looking at premium consumers and high-margin payments. It has cardholders who spend a lot, steady annual fees, and strong merchant ties. These factors help keep profit margins strong.
Business model strengths: high-income customer base and fee economics
The AmEx network focuses on wealthy cardholders and high-end products like Platinum and Gold cards. These customers spend more and pay annual fees, boosting revenue. You get income from transactions and recurring fees, both of which are less affected by economic ups and downs.
Recent revenue and EPS trends supporting long-term returns
Revenue growth has kept pace with the recovery in travel and entertainment spending post-pandemic. Cross-selling of lending and installment products has also increased interest income and earnings per share. Analysts see consistent revenue growth and margin improvement as key reasons to watch AmEx.
Dividend and buy-and-hold rationale for 2026
American Express offers steady cash generation and returns to shareholders through dividends and buybacks. Its loyal premium customer base and fee structure ensure a steady cash flow. For those building a portfolio of top stocks to hold, AmEx is a solid choice for long-term growth and income.
Stocks to Buy and Hold: dividend and income complements for portfolio balance
You can mix growth stocks with steady income to balance returns and meet cash needs. Choose reliable dividend stocks and high yield stocks that pass checks for income and safety. This creates a strong income layer for long term investing.
Begin with a list of stocks that have passed dividend-coverage tests. Look for midstream, telecom, REITs, and BDCs with sustainable distributions. These stocks act as a steady anchor when tech or cyclical stocks are volatile.
High-yield options to pair with growth names
Consider Ares Capital, Energy Transfer, MPLX, Rithm Capital, and Verizon as examples. Each has a different risk level and income source. Ares Capital and Rithm Capital are BDCs with high yields from loans. Energy Transfer and MPLX offer midstream cash flow. Verizon has telecom cash flow from its large scale and free cash flow.
Dividend reliability and yield ranges for 2026
Yields vary by sector. Midstream and telecom usually have yields between 5%–9%. REITs and BDCs can have yields from 5%–10%. It’s important to study payout ratios and cash flow coverage to avoid dividend traps.
How income stocks can reduce portfolio volatility over the long term
Regular distributions can lower volatility by providing cash during downturns. For retirees, dividends help fund living expenses without selling stocks. For accumulation accounts, reinvested payouts compound over time, smoothing out short-term swings.
Practical diversification tips
- Build a bench across income engines: pipelines, telecom, net-lease REITs, and BDCs.
- Avoid overconcentration in a single sector; spread position sizes so one cut to distributions won’t derail income needs.
- Check coverage metrics: DCF or AFFO coverage ratios around 1.3x–2.0x signal healthier payout sustainability.
| Issuer | Approx. 2026 Yield | Coverage Signal | Role in Portfolio |
|---|---|---|---|
| MPLX | 8.5% | Distribution covered ~1.5–1.7x DCF | Midstream cash flow, inflation-linked volumes |
| Enterprise Products Partners (EPD) | 6.8% | ~2.0x DCF coverage | Large-cap pipeline stability |
| Enbridge (ENB) | 5.9% | 1.3–1.4x coverage | Dividend growth, regulated assets |
| Ares Capital (ARCC) | 9.6% | NII covers payout ~102–104% | High-yield BDC, yield generation |
| Main Street Capital (MAIN) | 7.1% | Distributable NII covers payouts and specials | Lower-volatility BDC with dividends |
| Realty Income (O) | 5.7% | AFFO payout 70–75% | Net-lease REIT for predictable rent streams |
| VICI Properties | 6.4% | ~75% AFFO payout | Entertainment-focused REIT with stable rents |
| National Retail Properties (NNN) | 6.0% | ~70% AFFO payout | Retail net-lease REIT, tenant diversification |
| Verizon (VZ) | 6.8% | 55–60% FCF payout; $19B+ FCF cited | Telco income and defensive cash flow |
Focus on durable cash flow, not just high yields. Use these dividend stocks as complements to growth holdings. Over time, they support income needs and smoother returns in long term investing.
Portfolio construction: blending growth, dividends, and recovery plays
Creating a strong portfolio means mixing growth stocks like Microsoft and Nvidia with dividend payers and recovery plays. Your strategy should match your risk level, investment time frame, and cash needs. This approach helps you navigate market ups and downs while earning long-term gains.
Suggested position sizing and diversification
Start with a core of big, stable companies like Microsoft, Costco, and Nvidia. These are the foundation for long-term investments.
For satellite positions, focus on high-yield stocks and recovery plays. Allocate 5%–20% of your portfolio to each, based on your risk tolerance and investment size. Spread your investments across different sectors to minimize risks.
Rebalancing cadence and adding to winners
Rebalance your portfolio at least once a year or when it strays too far from your target. This involves trimming winners and boosting underperformers. Use dollar-cost averaging to invest in volatility, avoiding big, one-time purchases.
When a stock grows beyond its target, consider selling part of it. Use the money to invest in undervalued stocks or keep it in cash. This strategy helps manage risk and keeps your investment power strong.
Managing concentration risk and cash deployment
Keep an eye on how much of your portfolio is in one stock. Be cautious of risks like patent expirations or new regulations. Limit any stock to a size that won’t hurt your plan if it drops.
Always have cash on hand to invest when prices are low. Use a staged approach to investing, making smaller purchases over time. This method helps you invest steadily and reduces the risk of buying at the wrong time.
Practical checklist
- Set core weights for durable growth and mark them as long-term holdings.
- Allocate satellites to income and recovery plays for yield and upside.
- Rebalance annually or at a 5–10% drift threshold.
- Trim winners after extended rallies; redeploy into undervalued sectors.
- Keep cash ready and deploy in stages to reduce timing risk.
Risks to consider before you buy and hold
Before you commit to a buy and hold strategy, consider a few key risks. Long-term investments can be rewarding but also expose you to company mistakes, big changes in the market, and dividend issues that can lower your returns.
Company-specific vulnerabilities
Keep an eye on patent expirations at Vertex Pharmaceuticals and the timing of new drug approvals. Patent cliffs can quickly reduce future earnings. For Nvidia and Microsoft, watch out for competition from AMD, Intel, Google, and Amazon Web Services. Also, follow their progress on new chip and software plans.
For Costco, monitor membership renewal trends and margin pressure from price competition. American Express investors should watch cardholder behavior and rising credit losses.
Macro and sector sensitivities
Changes in interest rates can affect the value of high-growth stocks and increase costs for REITs and BDCs. Inflation can squeeze retail margins and raise input costs. An economic slowdown will reduce consumer spending and payment volumes, hitting retailers and payment networks.
Use analyst notes and market-data services to see how scenario changes alter fair-value estimates.
Dividend and income risks
High yields need careful scrutiny. Check if dividends are covered by cash flow metrics like DCF, AFFO, or FCF before relying on yield. MPLX and Enterprise Products Partners show stronger DCF coverage in income screens.
Ares Capital and Main Street Capital report metrics like NII and NAV that signal coverage, while payout ratios above 90% carry cut risk. You must confirm the essentiality of the business and principal preservation when picking dividend names.
Monitoring and action triggers
Track coverage ratios, NAV/book trends for REITs and BDCs, and unit or share dilution. Set alerts for earnings guidance changes, regulatory filings, and analyst revisions. Regular monitoring helps you decide whether to hold, add, or trim positions in your stocks to buy and hold list.
| Risk Type | What to Watch | Practical Check |
|---|---|---|
| Patent & regulatory | Patent expirations, FDA timelines for Vertex | Pipeline timelines, patent expiry calendar, cash runway |
| Competition & execution | Chip cycles, cloud competition for Nvidia and Microsoft | Roadmap milestones, R&D spending, market share trends |
| Retail pressure | Membership renewals, margin compression at Costco | Same-store sales, renewal rates, gross margin trends |
| Payments credit risk | Cardholder delinquencies and charge-offs at AmEx | Credit-loss reserves, net charge-off rates, customer mix |
| Rate & inflation | Interest-rate moves, input-cost inflation | Duration exposure, debt costs, input-cost pass-through |
| Dividend coverage | High-yield payout sustainability | DCF/AFFO/FCF metrics, payout ratio, NII or NAV trends |
Use a disciplined checklist tied to your buy and hold strategy. Review holdings periodically, compare them with alternative stocks to buy and hold, and act when coverage ratios, guidance, or macro signals shift your long-term thesis.
Practical steps to buy and hold these top stocks to hold
Start with a clear plan that matches your goals for investing for the long term. Define your time horizon, risk tolerance, and target allocation. This could be between growth names like Nvidia and dividend payers such as Verizon or Energy Transfer.
Use reliable filings and earnings reports to research tickers. Read 10-Ks and 10-Qs, watch quarterly calls from management, and track analyst models. This helps explain revenue, margin, and free cash flow drivers. Monitor metrics like DCF, FCF coverage, and AFFO for income names to decide which stocks to buy and hold.
Decide whether to own individual stocks, ETFs, or a blended approach. Individual tickers let you concentrate on high-conviction ideas. ETFs provide instant diversification and lower single-stock risk. A core ETF plus select individual positions can combine stability with upside.
Prefer tax-advantaged accounts for long-term holdings when possible. Hold core positions inside IRAs or 401(k)s to defer or avoid capital gains taxes. Use taxable accounts for dividend harvesting and specific tax-loss harvesting plays.
Apply dollar-cost averaging to reduce timing risk. Invest fixed amounts at regular intervals into your chosen stocks to smooth entry points. For high-yield and recovery names, start with smaller allocations and add on better entries as coverage ratios or fair-value narratives improve.
Set alerts for earnings releases and material news using quote feeds and news APIs. Re-evaluate holdings if guidance, coverage ratios, or fair-value assumptions change materially. Track holdings annually and check dividend coverage and revenue trends against your original thesis.
Use a simple tracking table to compare core metrics across your positions. The table below helps you spot trends and prioritize monitoring.
| Ticker | Primary Thesis | Key Metric to Watch | Suggested Action |
|---|---|---|---|
| NVIDIA | AI leadership and durable growth | Data center revenue and gross margin | Hold and add on strong earnings beats |
| Microsoft | Cloud and enterprise software diversification | Commercial cloud growth and operating margin | Buy and hold for steady growth |
| Costco | Membership revenue and retail resilience | Same-store sales and membership trends | Hold through cycles; add on dips |
| Vertex Pharmaceuticals | Defensive biotech with durable cash flow | Drug royalties and pipeline milestones | Hold with periodic pipeline reviews |
| American Express | Payments with high-income customer mix | Net interest revenue and fee income | Buy and hold for income and growth |
Reinvest dividends or allocate income according to your plan. Reinvestment increases compounding and supports a true buy and hold strategy over decades.
Review your plan yearly and after major market moves. When a thesis breaks, act with discipline. If a coverage ratio or guidance shift undermines the investment case, consider trimming or replacing the holding.
Follow these practical steps and you will have a repeatable process for identifying and holding high-conviction stocks to buy and hold as part of investing for the long term.
Conclusion
You now have a list of stocks to buy and hold into 2026. These include Nvidia, Microsoft, Costco, Vertex Pharmaceuticals, and American Express. You also have income stocks like MPLX, Enterprise Products (EPD), and Enbridge (ENB).
These picks offer growth and yield. This way, you can aim for total return while keeping cash flow in your portfolio.
Follow key buy-and-hold rules. Look for companies with strong cash flow and clear competitive advantages. Make sure their dividends are covered.
Size your positions based on how sure you are and how much risk you can take. Spread your investments across different sectors. Use dollar-cost averaging and tax-advantaged accounts to lower timing risks.
This approach helps manage volatility while keeping the chance for growth.
Keep an eye on payout coverage and trends in NAV or book value for income stocks. Also, watch analyst views that change fair value and forward P/E assumptions.
The best stocks to buy and hold require patience. But, stay alert to protect your investment and keep income steady over time.