10 Great Stocks for the Next 10 Years

Warren Buffett aims to hold stocks “forever.” We’re a bit less patient. But we like playing the long game: picking a few solid companies, sticking with them through tough times and hanging on for years, even a decade or more. Investing for the long haul can smooth out the risks of buying individual stocks, which may tumble or stay depressed for ages before taking off.

All of the following 10 companies possess attractive long-range prospects: Each should be able to expand its sales and profits at rates well above the market average for years.

Investing for the next decade doesn’t mean you can buy these stocks then forget about them. You’ll need to follow them closely and may have to sell if cracks emerge in the business. Still, if these companies can keep building on their recent successes, they have a good shot at delivering superb returns over the long run.

1.Acuity Brands

Symbol: AYI

Share price: $264.60

Market capitalization: $11.6 billion

52-week high/low: $280.89 - $169.42

Estimated earnings per share for the fiscal year ending in August 2017: $9.53

Estimated earnings per share for the fiscal year ending in August 2018: $11.55

Price-earnings ratio: 27

Dividend yield: 0.2%

The business: Acuity makes lighting products, fixtures and control systems for commercial, industrial and residential uses.

What will drive growth: The lowly lightbulb has gone high-tech. Businesses and consumers are installing high-efficiency LED bulbs. Digital lighting networks and “smart building” technologies that lower energy costs are proliferating in the U.S. and abroad. The trends should light a bright path for Acuity, a leading maker of LED bulbs, fixtures and high-end lighting systems. The company has also made several acquisitions to expand into areas such as lighting software and building-automation technology. Altogether, analysts see revenues climbing at a nearly 15% annual clip over Acuity’s next two fiscal years, which end in August 2017 and 2018.

2.Adobe Systems

Symbol: ADBE

Share price: $108.54

Market capitalization: $54.1 billion

52-week high/low: $109.07 - $71.27

Estimated earnings per share for the fiscal year ending in November 2016: $2.97

Estimated earnings per share for the fiscal year ending in November 2017: $3.86

Price-earnings ratio: 30

Dividend yield: none

The business: Adobe sells software, such as Photoshop, used by consumers and businesses for graphic design and digital imaging, along with cloud-based services and digital marketing tools.

What will drive growth: Creative types in advertising, media and other fields rely heavily on Adobe software, which faces scant competition in its niche. The firm is also making inroads into web analytics and digital marketing services, and it’s migrating customers to a subscription model for its “Creative Cloud” suite of software products, creating a long and steady revenue stream.

3. Celegene

Symbol: CELG

Share price: $106.06

Market capitalization: $80.8 billion

52-week high/low: $128.39 - $93.05

Estimated 2016 earnings per share: $5.71

Estimated 2017 earnings per share: $6.99

Price-earnings ratio: 16

Dividend yield: none

The business: Celgene makes the cancer-fighting drug Revlimid and other biotech medicines.

What will drive growth: Boosted by Revlimid—a drug that modifies the body’s immune system to fight cancer—Celgene aims to hit $21 billion in sales in 2020, up from an estimated $11.1 billion in 2016. Initially approved in 2006 as a second-line defense against multiple myeloma, a common type of blood cancer, the drug won approval in 2015 for patients newly diagnosed with the disease, expanding its sales and market potential.

4. Danaher

Symbol: DHR

Share price: $78.39

Market capitalization: $54.1 billion

52-week high/low: $82.64 – $61.10

Estimated 2016 earnings per share: $3.56

Estimated 2017 earnings per share: $3.90

Price-earnings ratio: 20

Dividend yield: 0.6%

The business: Danaher owns 29 businesses, primarily involved in life sciences, dental care, and medical diagnostics.

What will drive growth: A perpetual dealmaker, Danaher has bought and sold more than 400 companies since 1984. It now aims to focus on fast-growing products in health care and life sciences.

5.First Republic Bank

Symbol: FRC

Share price: $75.15

Market capitalization: $11.6 billion

52-week high/low: $78.77 - $56.32

Estimated 2016 earnings per share: $3.91

Estimated 2017 earnings per share: $4.41

Price-earnings ratio: 18

Dividend yield: 0.8%

The business: Spun out of Bank of America in 2010, First Republic is a bank that caters to wealthy customers.

What will drive growth: Attractive interest rates on mortgages help bring in upscale clients, who then take out more loans and avail themselves of other financial services from the bank.

6.Fortune Brands Home & Security

Symbol: FBHS

Share price: $58.10

Market capitalization: $8.9 billion

52-week high/low: $64.47 - $44.19

Estimated 2016 earnings per share: $2.74

Estimated 2017 earnings per share: $3.15

Price-earnings ratio: 19

Dividend yield: 1.1%

The business: Fortune Brands makes cabinets, faucets, doors and security systems, under brands such as Moen, Therma-Tru and Master Lock.

What will drive growth: The ongoing expansion of the housing market should lift Fortune’s sales for years. The company owns best-selling brands for cabinetry, doors and faucets.

7. Idexx Laboratories

Symbol: IDXX

Share price: $112.73

Market capitalization: $10.5 billion

52-week high/low: $115.06 - $63.48

Estimated 2016 earnings per share: $2.36

Estimated 2017 earnings per share: $2.69

Price-earnings ratio: 43

Dividend yield: none

The business: Idexx sells animal-health diagnostic tools and veterinary hospital instruments. The firm also runs diagnostic labs and tests municipal water systems for contaminants.

What will drive growth: A leader in “dog’nostics,” Idexx is benefiting from robust spending on veterinary care, which is climbing at about 9% per year

8. Lions Gate Entertainment

Symbol: LGF

Share price: $19.99

Market capitalization: $3.0 billion

52-week high/low: $41.41 - $16.21

Estimated earnings per share for fiscal year ending in March 2017: $0.40

Estimated earnings per share for fiscal year ending in March 2018: $0.63

Price-earnings ratio: 28

Dividend yield: none

The business: A Hollywood studio, Lions Gate produces and distributes TV series and movies.

What will drive growth: Although still relatively small, Lions Gate is becoming more of a Hollywood power player. The studio behind The Hunger Games and Orange is the New Black

9. Panera Bread

Symbol: PNRA

Share price: $194.72

Market capitalization: $4.6 billion

52-week high/low: $224.15 - $165.17

Estimated 2016 earnings per share: $6.69

Estimated 2017 earnings per share: $7.76

Price-earnings ratio: 26

Dividend yield: none

The business: Panera runs nearly 2,000 “bakery-cafés,” serving fare such as sandwiches, salads and baked goods. The firm also sells packaged goods at supermarkets, and it runs a corporate catering business.

What will drive growth: Even after opening more than 1,000 restaurants over the past decade, primarily in the Midwest and along the eastern seaboard, Panera still has plenty of room to expand in the southern and western U.S. The firm has invested in mobile ordering technologies.

10. Salesforce.com

Symbol: CRM

Share price: $71.33

Market capitalization: $48.3 billion

52-week high/low: $84.48 - $52.60

Estimated earnings per share for the fiscal year ending in January 2017: $0.95

Estimated earnings per share for the fiscal year ending in January 2018: $1.27

Price-earnings ratio: 60

Dividend yield: none

The business: Salesforce sells web-based software that helps companies generate and manage sales.

What will drive growth: Already a powerhouse in subscription-based, online “software-as-a-service” for big businesses, Salesforce is broadening its product lineup and pushing into areas such as data analytics and digital marketing.

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