It's tough trying to decide which stocks and sectors are going to perform well in the future.
Indeed, none of us can accurately predict the next ten minutes, never mind the next ten years!
However, one way of delivering consistently strong profits for your portfolio is to buy shares in companies that are of the highest quality, offer decent yields and have long term growth potential.
Of course, you never quite know how investments will pan out but, as history tells us, good value, high-yielding companies with bright futures should turn out relatively well. With that in mind, here are three stocks that could be worth buying now, and holding for the next ten years.
Woodside Petroleum Limited
With shares in Woodside Petroleum Limited (ASX: WPL) having tracked the ASX during the last three months through falling by 5%, they now trade at an even more attractive valuation. Indeed, they have a P/E ratio of just 13.1, which compares very favourably to the wider index's P/E of 14.9.
In addition, Woodside offers a fat, fully franked yield of 5.8% which could be as high as 6.6% in FY 2016 (assuming no change in the current share price) as a result of stunning earnings growth forecasts for the next two years of 18.9% per annum.
Certainly, the falling price of oil could hurt Woodside in the short run but, for long term investors, it looks like a top prospect.
Fortescue Metals Group Limited
Speaking of the declining price of commodities, Fortescue Metals Group Limited (ASX: FMG) has been hit very hard by a fall in the price of iron ore. Clearly, demand for the commodity has fallen and this has left it at a five-year low. As a result, Fortescue's bottom line is mirroring the fall.
However, Fortescue remains well placed to benefit from increased demand for iron ore over the long run. Its cost curve is relatively attractive and it continues to be a shareholder-friendly stock, with its payout ratio being a relatively generous 38%. This means that Fortescue has a fully franked yield of 5.2% which, when combined with a P/E ratio of just 9.3, means it could be a great long-term buy.
Ramsay Health Care Limited
Without doubt, people will still be using hospitals in ten years' time. So, an investment in Ramsay Health Care Limited (ASX: RHC) is likely to still be worth something in 2024.
Indeed, it could be worth a lot more than at present, since the private hospital operator is continuing to deliver strong earnings growth. It is expected to grow the bottom line at an annualised rate of 17.3% over the next two years, which is roughly in-line with its historical bottom line growth rate of 20.9% over the last ten years.
Furthermore, with a rapidly growing dividend, Ramsay could be yielding as much as 2.3% (and rising) by 2016.
