3 stocks to buy and hold forever: Unilever plc, Iomart Group plc and Zytronic plc

These 3 shares have huge long term potential: Unilever plc (LON: ULVR), Iomart Group plc (LON: IOM) and Zytronic plc (LON: ZYT)

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Unilever sign

Image: Unilever. Fair use.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Part of the challenge of being an investor is holding on to high quality companies for the long term. If they perform well, there is always a temptation to sell them. If they don’t perform well, there is a temptation to do just the same – even if the company in question is doing all of the right things, but is being hurt by short term external factors.

The skill, then, is in picking the best stocks and giving them the time to come good.

A very bright future

One company which appears to fall into this category is Unilever (LSE: ULVR). The consumer goods company has a very bright long term future owing mainly to its exposure to the emerging world. In fact, Unilever generates the majority of its sales from developing economies and with wages set to rise rapidly over the coming years, demand for Unilever’s products is likely to increase considerably.

Certainly, Unilever’s share price has performed well in recent years and its shareholders may be tempted to sell at the present time. However, this could be the worst time to do just that since all of the investment which Unilever has made in marketing its products in the emerging world looks set to bear fruit over the next 5+ years. As such, Unilever appears to be a stock to buy and hold forever.

Stunning track record

Also offering excellent long term growth potential is Zytronic (LSE: ZYT). Its track record is stunning, with the touchscreen glass manufacturer recording an annualised growth rate in earnings of almost 11% during the last five years. And with demand for touchscreen products likely to rise over the long run, as their use becomes more widespread across a number of different industries and applications, Zytronic’s outlook is highly positive.

In fact, over the next two financial years Zytronic is expected to continue to record positive earnings growth numbers. And with its shares yielding around 4.2%, they seem to offer excellent income prospects. That’s especially the case since Zytronic currently pays out just 50% of profit as a dividend, which indicates that shareholder payouts could move sharply higher over the medium to long term.

Rising demand

Meanwhile, Iomart (LSE: IOM) also seems to be another stock to buy and hold forever. That’s at least partly because the cloud computing space is likely to be a major growth area in the coming years as more businesses and individuals switch from physical to cloud storage.

As Iomart’s most recent final results showed, it is experiencing rising demand for its services, with sales increasing by 16% and adjusted pretax profit 14% higher than in the previous year. And with the scope for further partnerships within the Hybrid Cloud space, as well as additional M&A opportunities, Iomart seems to be a top-notch smaller company for the long term.

As with Zytronic, Iomart has an excellent track record of profit growth, with its bottom line rising by over 100% in the last four years. And with double-digit growth expected this year, now could be an excellent time to buy the company for the long term.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Unilever and Zytronic. The Motley Fool UK owns shares of and has recommended Unilever. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

The Meta share price falls 10% on weak Q2 guidance — should investors consider buying?

The Meta Platforms' share price is down 10% after the company reported Q1 earnings per share growth of 117%. Does…

Read more »

Investing Articles

This FTSE 250 defence stock looks like a hidden growth gem to me

With countries hiking defence spending as the world grows more insecure, this FTSE 250 firm has seen surging orders and…

Read more »

Bronze bull and bear figurines
Investing Articles

1 hidden dividend superstar I’d buy over Lloyds shares right now

My stock screener flagged that I should sell my Lloyds shares and buy more Phoenix Group Holdings for three key…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

A solid track record and 5.4% yield, this is my top dividend stock pick for May

A great dividend stock is about more than its yield. When hunting for dividend heroes, I look at several metrics…

Read more »

A senior group of friends enjoying rowing on the River Derwent
Investing Articles

£8k in savings? Here’s how I’d aim to retire with an annual passive income of £30,000

Getting old needn't be a struggle. Even with a small pot of savings, it's possible to build up a decent…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

Down 50% in a year! Are the FTSE’s 2 worst performers the best shares to buy today?

Harvey Jones is looking for the best shares to buy for his portfolio today and wonders whether these two FTSE…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

Is FTSE 8,000+ the turning point for UK shares?

On Tuesday 23 April, the FTSE 100 hit a new record high, in a St George's Day celebration. But I…

Read more »

Investing Articles

Here’s how I’d aim for a ton of passive income from £20k in an ISA

To get the best passive income from an ISA, I think we need to balance risk with the potential rewards.…

Read more »