2 Stocks to Buy on the Dip and Hold for 10 Years

Key Points

• The Trade Desk's recent revenue miss has likely given investors an excellent buying opportunity.

• Target's troubles have juiced its dividend yield and made its P/E ratio arguably too low to ignore.

• These 10 stocks could mint the next wave of millionaires ›

Price fluctuations have always been part of stock investing. Numerous factors, including data and emotion, can drive the price of a stock, particularly over short and medium-term time frames.

That's why it makes sense to invest for the long term. Over the course of years, companies that maintain a growth trajectory tend to see their stock prices rise. Even when a stock struggles due to short-term factors, a stock of a company buoyed by sustained expansion will typically rise over the long term. Knowing that, it may pay to buy two particular stocks amid recent declines. And I'd suggest holding for 10 years, or more.

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1. The Trade Desk

One stock that has experienced extreme fluctuations in recent months is The Trade Desk (NASDAQ: TTD). The buy-side digital advertising stock began 2025 on a high note, having reached its all-time high in December 2024. The growth of the digital ad industry and the growing popularity of its platform have helped drive stock price growth during its nearly nine-year history.

Unfortunately, the stock plummeted after the company reported missing its own revenue guidance for the fourth quarter of 2024. The losses continued after that announcement, and when it reached its "Liberation Day"-fueled low, it had fallen by approximately two-thirds over a four-month period.

However, after a rebound, it is now down by just over 40% from the December high.

Moreover, trends appear favorable for the digital advertising industry, as Grand View Research predicts a 15% compound annual growth rate (CAGR) for the industry through 2030. This should play into The Trade Desk's hands as companies and ad agencies turn to the platform's technology to buy ads on the platforms most likely to drive the highest returns for an advertising dollar.

Additionally, short-term trends have improved. In the first quarter of 2025, The Trade Desk returned to its previous history of beating in-house revenue estimates at a time when analysts forecast 17% revenue growth during 2025 and 18% the following year.

Indeed, its P/E ratio of about 100 may deter some investors. Nonetheless, the forward P/E ratio of 41 -- based on earnings estimates -- may make its current price more palatable. Finally, if you're holding for 10 years or more, the growth runway tends to make these ratios less relevant over time; the Trade Desk could return to its all-time highs and beyond in the foreseeable future.

2. Target

Target (NYSE: TGT) stock has declined by more than 60% from its 2021 high. Early in the decade, Target bought too much merchandise, resulting in an inventory overhang that remains unresolved to this day.

Moreover, at the same time, Target alienated a portion of its customer base by embracing diversity, equity, and inclusion efforts (DEI). When it reversed those efforts in 2025, another part of its customer base became upset with the company. That factor, along with an uncertain economy, has dampened sales.

In the first quarter of fiscal 2025 (ended May 3), net sales fell 3% yearly to just under $24 billion. This included a 4% decline in comparable-store sales, as foot traffic for the retailer decreased.

Additionally, the contract for CEO Brian Cornell is set to expire in September. Since he is in his 60s and has been CEO since 2014, I think Target is likely to have a new CEO in the near future, adding to uncertainty about the company's direction.

However, the negativity may be overdone. For one thing, over 75% of Americans live within 10 miles of a Target, giving it more reach than any retailer except Walmart.

The lower stock price has some unexpected benefits for new buyers. For one, it increases the appeal of its dividend, which has risen for 54 straight years. The payout, which now pays shareholders $4.56 annually, offers a dividend yield of 4.5% at the current stock price, far above the S&P 500 average of 1.2%. Since a dividend cut could dampen investor confidence, the payout hikes are likely to continue.

Secondly, the stock has fallen to a price-to-earnings ratio of 11. This makes it far cheaper than archrival Walmart at 41 times earnings. While Target's troubles are likely to persist for the foreseeable future, the valuation implies that the pessimism is overdone, positioning the stock for a recovery that can take it higher over the next 10 years.

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Will Healy has positions in Target and The Trade Desk. The Motley Fool has positions in and recommends Target, The Trade Desk, and Walmart. The Motley Fool has a disclosure policy.