2 Monster Stocks to Buy and Hold Forever

It's hard to predict which way the market, or any specific company, will move in a short period, like a single year. But the longer we expand our horizon, the more likely it is that excellent companies, and equities in general, will deliver solid returns. That's one of the reasons (along with tax advantages) that long-term investing is a great strategy.

However, this all hinges on which stocks you choose to buy -- putting your hard-earned money into subpar companies won't result in attractive long-term returns. That said, let's consider two highly profitable corporations that look worth investing in for good: Intuitive Surgical (NASDAQ: ISRG) and Visa (NYSE: V).

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1. Intuitive Surgical

Since medical care is always in high demand, innovative healthcare companies that can keep up with the changes in the industry can perform well over long periods. That describes Intuitive Surgical pretty well.

The company leads the robotic-assisted surgery (RAS) device market thanks to its da Vinci system. Intuitive Surgical is an innovator; it was one of the first companies to earn clearance for an RAS machine in the U.S., and has since developed several more iterations of its crown jewel. The increased adoption of robotic surgery has allowed the healthcare leader to generate excellent financial results and superior stock-market performance.

ISRG data by YCharts.

Why, though, should investors keep the stock in their portfolios for good? There are at least two reasons.

First, there's still substantial white space in the RAS market, which Intuitive Surgical leads. Besides the fact that demand for many of the procedures physicians can perform with the da Vinci system will increase as the world population ages, robotic surgeries accounted for less than 5% of total eligible surgeries as of two years ago. It could take decades before this number peaks, even as more companies join the industry.

That brings us to our second reason Intuitive Surgical's stock is worth holding onto forever: the company's moat, an essential thing for any business seeking long-term success. Intuitive's competitive advantage stems from multiple sources, including its many patents for novel creations, and the high switching costs involved once a hospital system has already purchased one of its da Vinci products.

So even as the field gets more crowded -- which will take a while, considering the difficulty of building and testing robotic platforms -- Intuitive Surgical should continue to perform well for a long time. The medical device specialist looks like a stock investors can safely buy and forget.

2. Visa

Everyone knows Visa, the financial services specialist that helps facilitate credit card transactions through its payment network. Millions of credit cards are in circulation branded with the company's famous logo, and Visa collects a fee every time a consumer uses one of those credit cards. That's not a bad business model, considering the number of daily transactions.

Visa's growth in the past decade has been driven by an increase in credit card transactions, which are displacing cash and checks. Credit cards are easier and more convenient to carry than large amounts of cash. They're also, generally speaking, safer to hold. Furthermore, credit cards cater to both online and in-person transactions, an important factor given the growth of e-commerce. So it's not surprising that Visa has been a terrific stock to own over the past decade:

V data by YCharts.

Like all stocks worthy of holding on to for good, Visa benefits from a competitive edge, and it's not just the company's strong brand name.

Its payment network is a textbook case of the network effect. The more that consumers hold cards bearing its logo, the more attractive it becomes to merchants, and vice versa. Not accepting a Visa card in places where the company is well-established might amount to turning down a ton of consumers, something large and successful businesses generally don't want to do.

Visa's network effect largely explains why it has so few direct competitors; the industry is practically a duopoly. And while the company has grown rapidly in recent years, there is still plenty of white space. Alfred Kelly, Visa's former CEO, said this a few years ago:

While cash displacement is certainly a reality, global personal consumption expenditure of cash and check grew at a CAGR [compound annual growth rate] of 2% over the 10 years ending in 2019. When we look at the opportunity ahead, if you assume global cash grows at 1% annually, industrywide digital penetration of personal consumption expenditure wouldn't reach 90% for several decades.

This paints quite the picture, with a clear message: Visa can continue growing for a long time. Here's one last reason to invest in the stock: It's an excellent dividend payer. Over the past decade, Visa has increased its payouts by almost 392%. Those who reinvest the dividend could see outsized returns over the long run.

Should you invest $1,000 in Intuitive Surgical right now?

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Prosper Junior Bakiny has positions in Intuitive Surgical. The Motley Fool has positions in and recommends Intuitive Surgical and Visa. The Motley Fool has a disclosure policy.