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

One of the biggest advantages of individual investors is the long investment period. If you can think in terms of years or decades, you have a great opportunity to outperform Wall Street professionals who only focus on the next quarter or next year.

This long-term approach increases your odds of beating the market, but it’s important to have this type of thinking and a lot of good companies. And ideally, you can purchase the stock at a discount compared to its peers.

These discounts are harder to find in markets like this given the massive rallies. S&P 500 From early 2023. But there’s still a deal left. Let’s take a look at some of the most attractive as of early April.

1. Walmart

walmart (WMT 0.59%) It’s not an expensive stock. Of course, the retailer’s market capitalization is nearly $500 billion, making it the largest company in the industry.

But its annual revenue is over $500 billion. In other words, you can purchase Wal-Mart for less than 1 times the annual sales, which is a slight discount compared to Wal-Mart. target It’s a huge discount in comparison. costco.

By owning Walmart stock, you’re not giving up exposure to growth. The chain reported a 6% sales increase in the holiday quarter, driven by strong customer traffic in its core U.S. market, large gains in its international business and surging demand in its e-commerce segment.

“Our team had a great quarter,” CEO Doug McMillon said in a statement in late February.

It’s true that Walmart is a mature business, so it’s unlikely to impress shareholders with huge stock price increases. However, the company has proven that it can still beat expectations while delivering higher cash returns through dividends and share buybacks. These factors can deliver excellent returns for patient investors.

2. McDonald’s

Something I like suddenly becomes unpopular McDonald’s (MCD -1.26%) In stock these days. The fast food chain has barely been in positive territory over the past year, largely due to concerns about slowing growth. But Mickey D has been here before.

Of course, customer traffic is declining in the chain’s core U.S. market. This recession is coming at the same time that price increases due to slowing inflation are coming to an end.

As a result, comparable store sales growth is likely to slow back to its previously normal rate of about 3 to 4 percent, executives said on a conference call with analysts. For context, McDonald’s had impressive growth rates of 9% last year and 10% in 2022.

But the world’s best fast food company has a lot going for it despite its slow growth. As the operating profit margin approaches 50% of sales this year, double-digit growth in performance is expected. McDonald’s also generates impressive cash flow from its retail space. This means investors can expect higher dividends and more spending on share buybacks in the coming years, even if growth stagnates.

Of course, the chain does not allow sales trends to stagnate. Management is investing aggressively in growth initiatives such as menu additions and popular drive-thru and home delivery sales channels.

However, the advantage of investing in McDonald’s stock is that you are likely to earn an acceptable return even if the fast food industry goes through a period of poor sales. Leading competitors in this space are able to keep investors happy through a variety of selling terms, making this stock a great choice for patient investors.