Got $5,000? Here are two undervalued stocks to buy and hold forever.

One of the biggest advantages of being an individual investor is having a longer time frame for investing. If you can think in terms of years or even decades, you have a good chance of outperforming the professionals on Wall Street who are only interested in the next quarter or year.

This long-term mindset improves your chances of beating the market, but the key is to combine this mindset with the fact that there are many great companies to own. Ideally, you'll be able to snap up these stocks at a discount to their peers.

given thatS&P 500The indexes have rallied sharply since the beginning of 2023, and it's hard to find such a snapback in a market like this. But the trade is still there. Let's take a look at some of the most attractive stocks as of early April.

1. Wal-Mart

Wal-Mart (NYSE: WMT)It's not an expensive stock. Of course, the retailer has a market capitalization of nearly $500 billion, making it the largest retailer in the industry.

But its annual revenue exceeds $500 billion. In other words, you can buy Wal-Mart for less than one times its annual sales, which is not the same as theTargetSlightly discounted compared toCostco (retailer) Compared to that, there is a big discount button.

Holding Wal-Mart stock doesn't mean giving up on growth. The chain's holiday sales rose 6% in the last quarter, thanks to strong traffic in core U.S. markets, significant growth in international business, and surging demand from its e-commerce division.

"Our team had an outstanding quarter in terms of industry performance," said Doug McMillon, Chief Executive Officer, in a statement in late February.

Admittedly, Wal-Mart doesn't excite its shareholders with huge stock price increases because it is such a mature company. But the fact remains that the company has been able to outperform expectations while generating higher cash returns through dividends and stock buybacks. These factors should pay off handsomely for the patient investor.

2. McDonald's

Recently, the favoriteMcDonald's (NYSE: MCD)There suddenly aren't many people in stocks. The fast-food chain's stock price has barely risen over the past year, mainly because of concerns about slowing growth. But McDonald's has been in this situation before.

Unfortunately, the chain's traffic in its core U.S. markets is declining. At the same time, the chain's price hikes have stopped due to slowing inflation.

As a result, Mr. Koon said in a conference call with analysts that the growth rate of comparable store noodle sales may slow down and return to the previous normal level of 3% to 4%. McDonald's comparable noodle sales growth was 9% last year and 10% in 2022.

However, the world's leading fast food company can do a lot with slower growth. With operating margins approaching 50% on sales, it's on track for double-digit earnings growth this year. McDonald's sales are also generating significant cash flow, which means investors can expect to see more dividends and more share buybacks in the coming years, even if growth stays sluggish.

However, McDonald's is not willing to let the sales trend stagnate. McDonald's executives are investing aggressively in growth plans, such as increasing the menu and developing the popular drive-thru and home delivery channels.

However, the good thing about investing in McDonald's stock is that even if the fast food industry goes through a sales downturn, you're likely to see an acceptable return. McDonald's is a leading competitor in the field and has been able to satisfy investors in all sales situations, making this stock a great choice for patient investors.

Should you invest $1,000 in McDonald's now?

Before buying McDonald's stock, consider the following:

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*Stock Advisory Rates as of April 4, 2024

Demitri Kalogeropoulos owns shares of Costco Wholesale and McDonald's. The Motley Fool has positions in Costco Wholesale, Target and Walmart. The Motley Fool has a disclosure policy.

Got $5,000? Here are two undervalued stocks to buy and hold forever. Originally posted by The Motley Fool.