3 Brilliant Growth Stocks to Buy Now and Hold for the Long Term

The best capital gains are derived by holding a stock over the long term. That's why patience is such an important characteristic for investors in growth stocks. If a business demonstrates consistent increases in profits and free cash flow, the market will naturally bid up its share price and make it more valuable over time.

Of course, it's not wise to just go out and buy up any growth company. The key is to be discerning and pick businesses that demonstrate important attributes that provide the confidence they can continue to deliver.

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These include a competent management team; a track record of growing revenue, profits, and dividends; and catalysts and plans to continue growing the business. With these characteristics in place, you will be in a better position to press the buy button.

Here are three such growth stocks that you can consider owning for the long term.

Image source: Getty images.

Ecolab

Ecolab (NYSE: ECL) specializes in water treatment technology, providing hygiene and infection-prevention solutions to customers in more than 170 countries. The company has steadily grown its revenue and net income over the past several years, as shown below.

Data source: Ecolab. Fiscal years end Dec. 31.

Not only has Ecolab grown its net income steadily, but the business is also increasing free cash flow (FCF), which went from $1.1 billion in 2022 to $1.8 billion in 2024. This healthy FCF generation has enabled it to raise its annual dividend without fail for 33 consecutive years; the latest boost in its quarterly payout was 14% year over year to $0.65 per share.

Management expects secular trends in the sectors it operates in to spur higher demand for the company's innovative technologies. Ecolab also has investments in various verticals such as data centers, microelectronics, and life sciences that should witness healthy growth this year and beyond.

Because of these positive trends, the business expects its adjusted diluted earnings per share (EPS) to improve by between 12% to 15% year over year. It also relies on acquisitions to power its growth, an example being the purchase of Barclay Water Management in November last year to help create new opportunities in proprietary water safety solutions.

Management has identified a large total addressable market of $152 billion, of which it has just an 11% share, leaving significant room for further growth. By 2050, it is estimated there will be 30% more people on the planet consuming 56% more food. To meet their freshwater needs, Ecolab projected a 56% deficit by 2030 that needs to be urgently addressed.

These trends will open up new opportunities for the company. Long-term financial targets are for 5% to 7% revenue growth per year, while attaining a 20% operating income margin (it's currently 17%), and growing EPS by 12% to 15% per year.

Ingersoll Rand

Ingersoll Rand (NYSE: IR) specializes in a broad range of air and fluid pumps, along with energy and medical technologies. The industrial company grew its revenue, operating income, and net income from 2022 to 2024, as shown in the table below.

Data source: Ingersoll Rand. Fiscal years end Dec. 31.

Like Ecolab, Ingersoll Rand also churned out consistent and increasing FCF over this period. Free cash flow went from $770.8 million in 2022 to $1.25 billion by 2024. The company also paid a quarterly dividend of $0.02 and authorized an additional $1 billion in share repurchase on top of its existing $750 million buyback mandate.

Ingersoll Rand relies on acquisitions for its growth. In 2024, the company made a total of 18 acquisitions and invested close to $3 billion, helping to increase its annualized revenue by around $625 million in the process.

For 2025, the company has already made two acquisitions. SSI Aeration designs and manufactures equipment for wastewater treatment plants, extending its capabilities in that sector. Excelsior Blower Systems provides blower technology and will add new capabilities and expanded distribution channels.

The company has identified around 200 active acquisition targets this year and expects to deliver double-digit adjusted EPS growth for 2025. Its total addressable market now stands at $67 billion, significantly higher than the $44 billion projected during the company's 2021 Investor Day. Product innovations and acquisitions have helped to boost this market, giving Ingersoll Rand a compelling runway for growth.

Northrop Grumman

Northrop Grumman (NYSE: NOC) is an aerospace and defense company that's one of the world's largest manufacturers of military equipment and weapons. Revenue increased over the last three years, with operating income following suit. Net income, however, should be viewed after excluding pension expenses and benefits, as shown below.

Data source: Northrop Grumman. Fiscal years end Dec. 31. Adjusted net income removes the effects of pension expenses and benefits.

FCF was also healthy, increasing from $1.5 billion in 2022 to $2.6 billion by 2024. This kind of steady increase has enabled the company to raise its annual dividend over 21 consecutive years without fail. The latest quarterly payout, $2.06 per share, represents a 10% year-over-year increase.

Management estimates that sales will come in between $42 billion and $42.5 billion for 2025, a 3% year-over-year improvement at the midpoint. FCF is projected to remain strong, totaling between $2.85 billion and $3.25 billion.

Northrop Grumman aims to maintain its technological leadership by delivering innovative solutions for its customers. Management says its focus will be on driving performance while maintaining efficiency. Meanwhile, the business will deploy its capital to generate sustainable long-term returns for its investors.

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*Stock Advisor returns as of March 18, 2025

Royston Yang has no position in any of the stocks mentioned. The Motley Fool recommends Ecolab. The Motley Fool has a disclosure policy.