Best Long-Term Stocks in September 2024 Based on 5Y CAGR

In the realm of investing, there are two types of investors: Long-Term and Short-Term. Long-term investing occurs when investors hold their investments for more than a year, while investments kept for less than a year are considered short-term investments. Investing in long-term stocks is often considered one of the most reliable ways to build wealth over time.

While the stock market can be volatile in the short term, history has shown that patient investors who focus on the long game can reap significant rewards. In this article, explore the best long-term stocks in September 2024 based on 5Y CAGR and the benefits of investing in long-term stocks.

Best Long-Term Stocks Based on 5Y CAGR – September 2024

Overview of 5 Best Long-Term Stocks

1. Lloyds Metals & Energy Ltd:Lloyds Metals & Energy manufactures Sponge Iron, produces Power, and engages in mining activities. The company’s Q1FY25 revenue was up 23% YoY, led by Higher sponge and Iron ore volumes. Q1FY25 iron ore volumes were the highest-ever quarterly volumes for the company. Even on the Realisation front, it was encouraging YoY. Sponge, too, recorded higher volumes both YoY and QoQ.

Key Metrics:

• Return on Equity (ROE): 56.6%
• Return on Capital Employed (ROCE): 78.3%

2. CG Power & Industrial Solutions Ltd: CG Power & Industrial Solutions is a global enterprise that provides end-to-end solutions to utilities, industries, and consumers for the management and application of efficient and sustainable electrical energy. The company offers products, services, and solutions in two main business segments: Power Systems and Industrial Systems. The company’s order book grew by 44% to ₹7,000 crores. The company believes that it is comfortably placed in terms of the order book, and the inquiries are very strong in the power business.

Key Metrics:

• ROE: 57.8%
• ROCE: 46.6%

3. Elecon Engineering Company Ltd:Elecon Engineering Company Ltd. was incorporated in 1960. The company manufactures and sells power transmission and material handling equipment in India and internationally. In addition, it engages in the steel and non-ferrous foundry business. Revenue from the Gear division was impacted by weakness in order inflow due to general elections in Q1 FY25. The company anticipates a demand uptick in the balance of 9M of FY25 to recoup the revenue loss in Q1 FY25.

Key Metrics:

• ROE: 24.5%
• ROCE: 31.3%

4. Godawari Power & Ispat Ltd: Godawari Power & Ispat is primarily involved in the business of Mining Iron Ore and Manufacturing Iron Ore Pellets, Sponge Iron, Steel Billets, Wire Rods, H.B. Wire and Ferro Alloys with the generation of Electricity. During Q1FY25, the company witnessed an increase in production volume of Iron Ore Mining, Pellets, Sponge Iron, Steel Billets, HB Wires & Ferro Alloys by 3%, 24%, 5%, 13%, 48% & 58%, respectively on YoY basis.

Key Metrics:

• ROE: 22.3%
• ROCE: 29.7%

5. BLS International Services Ltd:BLS International Services Limited (BLS), a part of the four-decades-old BLS Group with a global presence and diversified range of services, and is the biggest global player in visa application outsourcing. Revenue of the company grew by 28.5% YoY to ₹492.7 Crores in Q1FY25 from ₹383.5 Crores in Q1FY24

Key Metrics:

• ROE: 31.1%
• ROCE: 31%

Benefits of Investing in Long-Term Stocks

• Compounding Growth: One of the most powerful benefits of long-term investing is compounding. When you invest in stocks, not only do you have the potential to earn returns on your initial investment, but you can also earn returns on those returns. Over time, this compounding effect can significantly increase your wealth.
• Market Fluctuations Smooth Out: The stock market is known for its short-term volatility, with prices going up and down based on various factors like economic data, geopolitical events, and investor sentiment. However, over the long term, the market tends to trend upward, rewarding those who stay invested.
• Lower Risk of Loss: While no investment is without risk, the likelihood of experiencing a loss decreases the longer you hold onto your stocks. Historically, holding onto a diversified portfolio of stocks for 10 years or more has resulted in positive returns, even after accounting for market downturns.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.