3 Value Stocks to Buy and Hold Forever

There is never a shortage of stocks to consider buying. The only thing that needs to be considered is which stocks to buy, or which stocks to buy. As an investor, it is your job to find the best risk and reward program. However, this task is even more challenging when you are looking for true perpetual stocks. These companies must be able to continue their business ...... forever. These companies must also be able to adjust as needed.

To that end, here's a list of three value stocks that you can easily buy and hold forever with a $500 investment. You may also want to act sooner rather than later. With interest rates increasingly likely to remain relatively high for some time, value stocks could enter a period of long-term outperformance over growth stocks.

1. Bank of America

There is no denying that these are difficult times for the banking sector. Economic uncertainty has dampened demand for banking services, and more and more existing loans are falling into delinquency or even default.New York Community Bancorp) The recent disclosure of "significant deficiencies" in its loan-testing process, which ultimately led to the ouster of its mat exec, has reignited last year'sSVB Financial Silicon Valley Bank, a subsidiary ofSilicon The collapse of Valley Bank and First Republic Bank had repercussions.

But don't take the noise too seriously. What is happening in the banking sector at the moment is something that banks have never experienced or resonated with before. The cyclical nature of banking is predictable. The specific causes and responses can be predicted.

This pairBank of America (New York Stock Exchange: BAC)This is good news for Bank of America and its shareholders. As one of the largest and most well-capitalized banks in the United States, Bank of America is well positioned to weather the storm. Its revenues are expected to fall 9% this year, but earnings are expected to rise, and next year's revenue growth will be slightly higher than 5%.

However, there is a reason why Bursa Bank shares have performed so well recently. The turnaround in the banking sector may come sooner than expected.

Take Green Shoots in the area of corporate underwriting, for example. According to EY (formerly Ernst & Young), the total number of initial public offerings completed globally in the first quarter fell by 71 TP3T, but the total amount of capital raised increased by 71 TP3T year-over-year.Morgan Stanley) forecasts a 50% increase in corporate transaction volume by 2024.

Investment banking is, of course, only a small part of U.S. banking. But most of its lines of business are mutually reinforcing. Currently, Bank of America's stock is trading at 11.7 times this year's estimated earnings of $3.14 per share.

2. Kinder Morgan

If you think the world will burn less oil and gas now that renewable energy sources like solar and wind are available, think again. While the aggregate growth rate of oil consumption will likely peak in 2028, we will still be consuming more crude oil in a few decades than we do now. In fact, the U.S. Energy Information Administration recognizes that oil will continue to be the dominant source of energy production on the planet until at least 2050, due to the growing global population and its increasing demand for electricity.

And that's just crude oil. At that point, natural gas will still be the world's third-largest source of fuel for power generation, only to be overtaken by renewables by the end of the 2030s. By then, we will also be burning more natural gas than we do now. We will still need a way to transport natural gas and oil to get them to where they are ultimately needed.

EnterKinder Morganfirms(New York Stock Exchange: KMI)The

It is an oil and gas company, but is not the same asEverson Mobilrespond in singingshell tagIt's remarkably different compared to the more familiar energy companies such as Kinder Morgan is an energy logistics company. It owns and operates 82,000 miles of gold pipeline that can transport crude oil, natural gas, gasoline, and even carbon dioxide across the United States (helping to boost production from existing wells). As long as the U.S. is drilling and flaring natural gas and oil, there will be a demand for Kinder Morgan's services.

But here is the crux of the bullish argument: the success of Koon & Co. has nothing to do with the price of oil or gas. It charges for the amount of gas and oil it transports and the distance it transports it; the price of crude oil or gas does not affect Kinder Morgan's profit or loss.

This business model is, of course, very well suited to support dividends. As a result, Kinder Morgan's current dividend yield is 6.1%.

3. Berkeley Hathaway

Last but not least, in the case ofBerkshire Hathawayfirms(Berkshire Hathaway ) ( New York Stock Exchange Stock Codes: BRK .A) (New York Stock Exchange: BRK).B) to consider taking a stake in the company when its price is less than 10 times its 12-month trailing earnings per share.

This is not a traditional stock. Instead, it's a basket of stocks handpicked by Warren Buffett, plus more privately held companies like GEICO Insurance, Duracell batteries, BNSF Railway, and See's Candies, to name a few. However, Berkshire is still valued as a value stock, and is priced as a value stock because these privately held companies generate such reliable cash flow - one of the more common attributes of value stocks. These private companies account for about two-thirds of Berkshire Hathaway's 2023 operating profit.

However, this is still not the exact reason why you would want to own this stock. Neither is the dividend, as Berkshire does not pay any dividends!

Instead, the main reason value-seeking investors may now want to hold shares of Berkshire Hathaway is that it remains the easiest and most efficient way to maximize returns from such stocks. Warren Buffett is not just a fan of value investing. He is recognized as the best value stock picker! Berkshire & Co.'s long history of beating the market proves it.

Extra Bonus: Berkshire shareholders can rest assured that Warren Buffett can hold on to his spare cash and won't hold on to new - and potentially unprofitable - stock just to do something with it. Berkshire Hathaway doesn't see any other stocks worth buying long-term, and is sitting on $167.6 billion worth of cash waiting for a real opportunity.

Note that there are two versions of Berkshire stock, with A shares currently trading at around $620,000 per share. If you only have about $500 to spend at the moment, you may want to consider B shares, which are currently trading at close to $410. But don't worry. Both stocks are performing about the same.

Should you invest $1,000 in Berkshire Hathaway now?

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SVB Financial provides credit and banking services to The Motley Fool. Bank of America is an advertising郃 partner of The Ascent, a Motley Fool company. james Brumley does not own any of the above stocks. the Motley Fool holds shares of recommended Bank of America, Berkshire Hathaway, and Kinder Morgan. the Motley Fool has a disclosure policy.

Got $500? 3 Value Stocks to Buy and Hold Forever was originally published by The Motley Fool.