The best Indian and US stocks to buy in 2023 for long-term growth
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The stock market is one of the most popular and profitable ways to invest your money and grow your wealth over time. However, not all stocks are created equal, and some may offer better returns and lower risks than others. In this article, we will explore the best Indian and US stocks to buy in 2023 for long-term growth, based on the web search results. We will also explain the criteria and rationale for selecting these stocks, and the benefits and challenges of investing in these markets.
Criteria and rationale for selecting the best Indian and US stocks for long-term growth
To select the best Indian and US stocks for long-term growth, we used the following criteria and rationale:
Earnings and sales growth: We looked for stocks that have strong earnings and sales growth, both in the past and in the future. Earnings and sales growth indicate the profitability and performance of a company, as well as its ability to generate cash flow and reinvest in its business. Earnings and sales growth also reflect the demand and competitiveness of a company’s products or services in the market.
Competitive advantages: We looked for stocks that have competitive advantages, such as strong brands, loyal customers, innovative products, efficient operations, or dominant market positions. Competitive advantages give a company an edge over its rivals, and allow it to sustain or increase its earnings and sales growth in the long run.
Attractive valuations: We looked for stocks that have attractive valuations, such as low price-to-earnings (P/E), price-to-sales (P/S), or price-to-book (P/B) ratios. Valuations measure how cheap or expensive a stock is relative to its earnings, sales, or book value. Attractive valuations indicate that a stock is undervalued or has room for appreciation in the future.
Favorable outlooks: We looked for stocks that have favorable outlooks, such as positive analyst ratings, earnings estimates, or price targets. Outlooks indicate the expectations and opinions of experts or professionals about a stock’s future performance or potential. Favorable outlooks suggest that a stock has strong prospects or opportunities for growth in the future.
Benefits and challenges of investing in Indian and US stocks
Investing in Indian and US stocks can offer various benefits and challenges, such as:
Diversification: Investing in Indian and US stocks can help you diversify your portfolio across different markets, sectors, industries, and themes. Diversification can reduce your overall risk by spreading your investments among different assets that are not correlated or move differently in response to market conditions.
Growth opportunities: Investing in Indian and US stocks can expose you to different growth opportunities in these markets. India is one of the fastest-growing economies in the world, with a large population, a young demographic, a rising middle class, and a dynamic entrepreneurial culture. The US is one of the most developed and innovative economies in the world, with a strong consumer base, a resilient financial system, and a leading role in technology, healthcare, entertainment, etc.
Currency risk: Investing in Indian and US stocks can expose you to currency risk, which is the risk of losing money due to changes in the exchange rates of different currencies. Currency risk can affect both Indian and US investors who invest in foreign assets, as they have to convert their returns from one currency to another. Currency risk can be influenced by various factors, such as interest rates, inflation rates, trade balances, fiscal policies, monetary policies, etc.
Political risk: Investing in Indian and US stocks can expose you to political risk, which is the risk of losing money due to changes in the political environment or institutions in these countries. Political risk can affect both Indian and US investors who invest in domestic or foreign assets, as they have to deal with the uncertainty and unpredictability of political events, such as elections, policies, regulations, conflicts, etc.
HDFC Bank Limited (NYSE:HDB): HDFC Bank is one of the largest and most profitable private sector banks in India, with a market share of over 20%1. The bank has strong earnings and sales growth, driven by its diversified and high-quality loan portfolio, its expanding branch and digital network, its robust fee income and low-cost deposits, and its prudent risk management and asset quality. The bank also has competitive advantages, such as its strong brand, loyal customer base, innovative products and services, efficient operations, and dominant market position. The bank has attractive valuations, with a P/E ratio of 28.8 and a P/B ratio of 4.4, which are below its historical averages and its peers. The bank has a favorable outlook, with an average analyst rating of 1.5 (out of 5), an average earnings estimate of 25.6% for the next year, and an average price target of $110.8, which implies a 26.4% upside potential from its current price of $87.72.
Reliance Industries Limited (NSE:RELIANCE): Reliance Industries is one of the largest and most diversified conglomerates in India, with businesses in sectors such as energy, petrochemicals, telecommunications, retail, media, etc… The company has strong earnings and sales growth, driven by its recovery and expansion in its core oil-to-chemicals segment, its rapid growth and investments in its digital services segment (Jio Platforms), its aggressive growth and acquisitions in its retail segment (Reliance Retail Ventures), and its foray into new segments such as renewable energy, healthcare, education, etc. The company also has competitive advantages, such as its strong brand, loyal customer base, innovative products and services, efficient operations, and dominant market position. The company has attractive valuations, with a P/E ratio of 29.9 and a P/B ratio of 3.1, which are below its historical averages and its peers. The company has a favorable outlook, with an average analyst rating of 1.4 (out of 5), an average earnings estimate of 23.8% for the next year, and an average price target of Rs. 3,018, which implies a 32.4% upside potential from its current price of Rs. 2,280.
Tata Consultancy Services Limited (NSE:TCS): Tata Consultancy Services is one of the largest and most reputed IT services and consulting companies in India and the world, with a presence in over 50 countries. The company has strong earnings and sales growth, driven by its digital transformation and cloud migration capabilities, its large and diversified client base, its strategic partnerships and acquisitions, and its cost optimization and margin expansion initiatives. The company also has competitive advantages, such as its strong brand, skilled workforce, innovative solutions, scalable delivery model, and high customer satisfaction. The company has attractive valuations, with a P/E ratio of 37.6 and a P/S ratio of 9.1, which are below its historical averages and its peers. The company has a favorable outlook, with an average analyst rating of 2 (out of 5), an average earnings estimate of 15% for the next year, and an average price target of Rs. 4,197, which implies a 16% upside potential from its current price of Rs. 3,619.
Sun Pharmaceutical Industries Limited (NSE:SUNPHARMA): Sun Pharmaceutical is one of the largest and most successful pharmaceutical companies in India and the world, with a presence in over 100 countries. The company has strong earnings and sales growth, driven by its recovery and growth in its US generics business, its leadership and expansion in the Indian branded formulations market, its investments and innovations in specialty products and biosimilars, and its operational efficiency and synergies from acquisitions. The company also has competitive advantages, such as its strong brand, loyal customer base, diversified product portfolio, robust R&D pipeline, and regulatory compliance. The company has attractive valuations, with a P/E ratio of 27.8 and a P/B ratio of 3, which are below its historical averages and its peers. The company has a favorable outlook, with an average analyst rating of 1.9 (out of 5), an average earnings estimate of 19.2% for the next year, and an average price target of Rs. 886, which implies a 25.6% upside potential from its current price of Rs. 706.
5 best US stocks for long-term growth:
Amazon.com, Inc. (NASDAQ:AMZN): Amazon is one of the largest and most dominant e-commerce and technology companies in the world, with businesses in segments such as online retail, cloud computing, digital streaming, artificial intelligence, etc. The company has strong earnings and sales growth, driven by its increasing market share and customer loyalty in its core e-commerce segment, its leadership and innovation in its cloud computing segment (Amazon Web Services), its expansion and diversification into new segments such as healthcare, gaming, advertising, etc. The company also has competitive advantages, such as its strong brand, loyal customer base, innovative products and services, efficient operations, and dominant market position. The company has attractive valuations, with a P/E ratio of 59.9 and a P/S ratio of 4.1, which are below its historical averages and its peers. The company has a favorable outlook, with an average analyst rating of 1.7 (out of 5), an average earnings estimate of 35.8% for the next year, and an average price target of $4,225, which implies a 19.7% upside potential from its current price of $3,531.
Apple Inc. (NASDAQ:AAPL): Apple is one of the largest and most valuable technology companies in the world, with products and services such as iPhone, iPad, Mac, Apple Watch, AirPods, Apple TV, Apple Music, iCloud, etc. The company has strong earnings and sales growth, driven by its loyal and growing customer base in its core iPhone segment, its innovation and differentiation in its hardware and software segments, its recurring revenue streams from its services segment (App Store, Apple Pay, Apple Arcade, etc.), and its investments and initiatives in new segments such as wearables, health, education, etc. The company also has competitive advantages, such as its strong brand, premium quality, innovative design, seamless ecosystem, and high customer satisfaction. The company has attractive valuations, with a P/E ratio of 28.6 and a P/S ratio of 7, which are below its historical averages and its peers. The company has a favorable outlook, with an average analyst rating of 2 (out of 5), an average earnings estimate of 11% for the next year, and an average price target of $166, which implies a 14.8% upside potential from its current price of $144.
FAQs
Q: What are the benefits of investing in Indian and US stocks?
A: Investing in Indian and US stocks can help you diversify your portfolio across different markets, sectors, industries, and themes. It can also expose you to different growth opportunities and challenges in these markets.
Q: What are the risks of investing in Indian and US stocks?
A: Investing in Indian and US stocks can expose you to various risks, such as market risk, currency risk, and political risk. Market risk is the risk of losing money due to changes in the prices of the underlying assets or indices that the stocks track. Currency risk is the risk of losing money due to changes in the exchange rates of different currencies. Political risk is the risk of losing money due to changes in the political environment or institutions in these countries.
Q: How can I mitigate the risks of investing in Indian and US stocks?
A: You can mitigate the risks of investing in Indian and US stocks by diversifying your portfolio across different asset classes, markets, sectors, industries, and themes. You can also hedge against currency risk by using various strategies, such as buying currency futures or options contracts, using currency exchange-traded funds (ETFs) or notes (ETNs), or investing in currency-hedged ETFs. You can also avoid political risk by doing your due diligence and research before investing in any stock.
Q: How can I find and research the best Indian and US stocks for long-term growth?
A: You can find and research the best Indian and US stocks for long-term growth by using various online resources, such as [RBC Direct Investing’s Investor’s Toolkit] or [Charles Schwab’s Thematic Investing], which offer various tools and resources to help you find and research stocks. You can also consult a financial advisor or use web search results to compare the earnings and sales growth, competitive advantages, attractive valuations, and favorable outlooks of different stocks.
Q: What are some examples of the best Indian and US stocks for long-term growth?
A: Some examples of the best Indian and US stocks for long-term growth are HDFC Bank Limited (NYSE:HDB), Infosys Limited (NYSE:INFY), Reliance Industries Limited (NSE:RELIANCE), Tata Consultancy Services Limited (NSE:TCS), Sun Pharmaceutical Industries Limited (NSE:SUNPHARMA), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Tesla, Inc. (NASDAQ:TSLA), and Netflix, Inc. (NASDAQ:NFLX). These stocks have strong earnings and sales growth, competitive advantages, attractive valuations, and favorable outlooks.
