Happy New Year: Top 3 Stocks to Buy for Long-Term Growth and Attractive Dividends

First, we would like to wish all our members a happy new year and thank you for being a part of our community. Today, we’re taking a closer look at three stocks for which we recently issued a long-term “buy” rating. We see strong growth potential in these companies over the long term, and they are also offering attractive high dividend yields, ranging from 4.48% to 8.70%, providing a reliable income stream. In this article, we will walk you through these stocks and offer some suggestions on how to buy them and at what share price level. HM1: High-Conviction Investments and Meaningful Contributions to Australian Medical Research Organizations – Long-Term “Buy” Hearts and Minds Investments (ASX: HM1) is a great option for long-term investors who want to see strong returns while supporting a meaningful cause. Since launching in 2018, the company has focused on high-conviction global equities, especially in sectors like biotechnology and technology. What really makes HM1 stand out, though, is its dedication to philanthropy. Each year, the company donates 1.5% of its net tangible assets to Australian medical research organizations. So, when you invest in HM1, you’re not just looking at potential growth – you’re also contributing to something bigger. Looking at its financial performance, HM1 has delivered impressive results. With a compound annual pre-tax return of 9.3% since its start and a strong one-year return of 32.2% as of October 31, 2024, it’s clear the company knows how to pick top-performing stocks. Big names like NVIDIA, Microsoft, and Amazon have been key drivers behind this growth, particularly in biotechnology, semiconductors, and technology infrastructure. And it doesn’t stop there – HM1 also offers a fully franked dividend yield of ~5.1%, making it an attractive choice for those who want a reliable income stream in addition to potential capital appreciation. What really sets HM1 apart, however, is its commitment to giving back. In 2024 alone, it donated $9.4 million to research into chronic diseases and mental health, with an additional $6.4 million reserved for future contributions. With the fund being managed pro bono, HM1 is able to maximize its financial impact while doing good in the world. We believe HM1 is a fantastic long-term investment, offering both solid returns and the chance to contribute to a cause that truly matters. When to Buy HM1: Ideal Entry Points HM1 shows solid support within the $2.92 to $3.12 range. We recommend that our members use a dollar-cost averaging approach to build a position in HM1 gradually. We anticipate a potential rebound around the $3 mark, followed by a retest of the recent high at $3.27. A decisive breakout above the $3.27 resistance could set the stage for a rally towards our target of $4.53, with the potential for further upside to $5 per share. IVE Group (ASX: IGL) Delivers Growth and Profitability Through Strategic Acquisitions and Innovation – Long-Term “Buy” IVE Group, Australia’s largest marketing services company, has delivered strong growth and profitability, driven by strategic acquisitions like JacPak in packaging and Elastic Group in creative services. With a diversified portfolio across sectors such as financial services, retail, and publishing, the company is well-equipped to navigate market fluctuations. We’ve seen solid financial performance, with growing revenues, improved margins, and a consistent dividend payout. As we look ahead to FY25, the outlook remains positive, and based on our analysis, we believe IVE is undervalued. We’re initiating a “buy” rating with a target price of $2.73 per share, suggesting an upside of +31%. Diversification has been a key driver of IVE’s growth, allowing the company to expand into high-demand markets. Acquisitions like JacPak and Elastic Group have strengthened its position in the packaging and creative services sectors, providing additional revenue streams. JacPak has already contributed $28.3 million to FY24’s revenue, and the growth of IVE’s e-commerce platform, Lasoo, is exceeding expectations. We see these moves as vital to IVE’s future success, as they position the company to capitalize on evolving customer needs and market opportunities. Looking to FY25, we remain optimistic about IVE’s financial prospects. The company expects NPAT to fall between $45 million and $50 million, despite challenges like potential losses from Lasoo and restructuring costs. IVE is committed to maintaining a steady dividend of 18.0 cents per share, which will help preserve cash for debt reduction and future investments. After applying multiple valuation methods, including the dividend discount model and discounted cash flow approach, we estimate the intrinsic value at $2.73 per share, indicating a 31.8% undervaluation. With strong growth potential and a solid market position, we recommend IVE as a “buy” for the long term. When to Buy IGL: Ideal Entry Points IVE Group (ASX: IGL) shares are currently consolidating within the $1.975 to $2.28 range, with strong support around the $1.975 to $2.06 per share level. We recommend a gradual deployment of capital, aiming for an entry near the $2 mark. A decisive breakout above the $2.28 medium-term resistance could pave the way for a rally towards our target of $2.73, with potential for further gains, possibly reaching $3 in the long term. Pengana International Equities Ltd. (ASX: PIA) offers global growth, ethical investments, solid finances, and strong long-term potential We believe Pengana International Equities Ltd. (ASX: PIA) represents an appealing long-term investment, driven by its focus on high-quality global businesses with significant growth potential. Through its partnership with Harding Loevner, a U.S.-based equity fund manager with over 30 years of experience, PIA has access to expert insights in sectors such as technology, healthcare, and renewable energy. We note that PIA manages a robust $338 million portfolio, operates debt-free, and holds $14 million in cash, ensuring financial stability and the ability to maintain consistent dividends, with a current yield of approximately 4.48%. We assign a fair value of $1.35 per share, positioning PIA as a solid long-term investment. What sets PIA apart is its ethical investment strategy, which screens companies based on environmental, social, and governance (ESG) factors. This aligns the portfolio with some of the fastest-growing sectors, including tech, healthcare, and renewable energy. Our research highlights PIA’s disciplined approach to investing in companies with competitive advantages, solid management, and strong financials. Additionally, PIA’s debt-free status and proactive capital management, such as its share buyback program, enhance its appeal for income-focused investors, offering both stability and shareholder value. Looking forward, we are confident that PIA is well-positioned to capitalize on global growth trends, particularly in AI, technology, and renewable energy. Despite global economic uncertainties, we see PIA’s $338 million portfolio and its solid financial health as a strong foundation for both growth and income. With global GDP growth expected to remain around 3%, we believe PIA’s strategic focus on long-term growth industries will continue to drive positive performance. Our valuation of $1.35 per share, based on a Dividend Discount Model, underscores the investment’s long-term potential and makes PIA a compelling choice for growth and income-oriented investors. When to Buy PIA: Ideal Entry Points PIA continues to show strong upside momentum, maintaining solid support at key moving averages, including the 50-DMA and 200-DMA. We see significant support around the $1.19 level. However, PIA is encountering resistance near $1.23. We recommend a gradual capital deployment strategy, with an ideal entry point around $1.19, and potentially lower at $1.17. A clear breakout above the near-term resistance at $1.23 could pave the way for a rally towards our initial target of $1.35.