2 Soaring Stocks to Hold for the Next 20 Years

It's tempting to avoid stocks whose prices have gone up a lot. After all, you may feel you've missed the boat.

But if a company has bright growth prospects, it's a sound money-making strategy to purchase the shares. That's particularly true if you plan on holding them for decades.

Costco (NASDAQ: COST) and Target (NYSE: TGT) have both seen their stock prices rise a lot this year. However, they remain buying opportunities for long-term holders.

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1. Costco

Costco's shares have gained 13% this year through March 19. That strong performance comes as the S&P 500 (SNPINDEX: ^GSPC) lost 3.5%.

While members have clamored for Costco's value pricing during these challenging economic times, it's always attracted a crowd. For those unfamiliar with Costco's business, it charges members an annual fee to shop at the warehouse club. In exchange, they get access to an incredibly broad range of goods and services at attractive unit prices.

It's a simple concept that clearly resonates with consumers. The company has long had high retention and consistently added new members. Costco reported about a 90% renewal in its fiscal second quarter, which ended on Feb. 15. It also ended the period with 82.1 million paid members versus 81.4 million on Nov. 23, 2025.

This has translated into consistent profit growth. Costco's quarterly operating income came in at $2.6 billion, a 12.5% year-over-year increase.

With its long-term successful track record, investors expect continued success, based on the stock's valuation. Costco's shares trade at a price-to-earnings (P/E) ratio of 51, while the S&P 500 has a multiple of 28.

But with strong execution and expansion opportunities (Costco has been opening 20 to 30 warehouses annually), I believe the stock warrants a higher multiple, and the long-term investing thesis remains intact.

2. Target

Target had been a successful retailer by offering differentiated and exclusive merchandise offerings. However, the company got away from its roots, customers balked, and sales suffered.

But new CEO Michael Fiddelke has promised changes. These include going back to differentiated merchandise, improving stores, and investing in technology.

Target's fiscal fourth-quarter same-store sales (comps) dropped 2.5%. However, management expects Target to post a small comps increase this year, reversing the negative trend.

While the new CEO and his team need to execute the plan, I think it's a sound strategy. After all, focusing on differentiated offerings that drew customers to Target and the customer experience seems like a wise course.

Stock investors clearly like the company's direction, although it's very early in the process. Target's shares increased 17.1% this year.

Despite the stock's big rise, it still trades at an attractive valuation. It has a P/E multiple of 14, up from 12 at the end of 2025. The shares currently trade at half the P/E ratio of the S&P 500.

With a good plan in place and a reasonable valuation, Target's shareholders should reap the rewards for years to come.

Lawrence Rothman, CFA has positions in Costco Wholesale and Target. The Motley Fool has positions in and recommends Costco Wholesale and Target. The Motley Fool has a disclosure policy.