3 best stocks to buy and hold forever
NOTAny stocks you invest in will be big winners, but owning just a handful of stocks that offer decades-long streaks of gains can produce life-changing returns – if you hold on patiently. Consider that Microsoft has generated a total return of approximately 26,600% over the past 30 years. AppleThe performance on this stretch was even better – an astounding efficiency of around 78,400%.
With that in mind, we asked three Motley Fool contributors to assess the profiles of companies that they believe have what it takes to deliver fantastic long-term performance. they identified Activision Blizzard (NASDAQ: ATVI), Nike (NYSE: NKE), and Airbnb (NASDAQ: ABNB) like stocks to be settled and forgotten that could crush the market.
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Bet on the growth of interactive entertainment
Keith noonan (Activision Blizzard): The video game industry has already grown in leaps and bounds, but interactive entertainment is still a relatively young medium and has untapped potential. Activision Blizzard is an industry leader who looks set to continue serving hits, and the company’s shares should be a winner for long-term investors.
At present, his great achievement is the Call of Duty franchise. The series played an important role in Activision Blizzard’s performance for around two decades, but popular action game ownership has never been more successful or more central to the performance of the overall publishing unit than it is. ‘it is not today. In addition to great successes with retail releases for both PC and console platforms, the company has found tremendous success in connecting the popular shooter with new platforms and distribution methods.
Call of Duty appears poised to continue to deliver industry-defining performance, and Activision Blizzard also has a wide range of other success properties to which it could apply a similar pattern and potentially generate other solid results.
The company arguably has the best line of franchises in the video game industry, including World of warcraft, Candy Crush Saga, Diablo, and Monitoring, Just to name a few. With category-defining successes across a variety of genres, it should be able to continue to use its properties as launching pads for new, innovative and engaging experiences. And based on its track record of successfully developing and marketing new blockbuster titles, there will be more franchises to come.
The stock has climbed around 630% over the past decade, but it’s likely its growth story is just beginning. For investors looking to profit from the growth of interactive entertainment, Activision Blizzard has the makings of a long-term winner.
Strong management, a great brand and a growing dividend
Will Ebiefung (Nike): Top-notch stocks are established industry leaders and, as the world’s most valuable clothing brand with 57 years of existence, Nike is the best brand it can be. Its track record of success and its proven ability to adapt to changes in the industry make it a bet of choice for long-haul investors.
Great managers turn challenges into opportunities, and the Nike team demonstrated this skill during the coronavirus pandemic. The company spent 2020 accelerating its “direct-to-consumer offense” – a plan to get closer to its customers by cutting out middlemen and leveraging e-commerce. This strategy could strengthen Nike’s brand identity, which is the key to sustaining growth.
The company’s fourth quarter tax results show these efforts are gaining traction. For the period ended May 31, revenue climbed 96% year over year to $ 12.3 billion. And that was due to more than just a comparison to 2020; sales were also up 21% from the fourth quarter of fiscal 2019. Nike Direct sales were up 73% to $ 4.5 billion, thanks to strong digital sales. And the company generated earnings of $ 3.56 per share, up 123% from the prior year period.
For long-term investors, compound dividend growth can add up. And while Nike’s current 0.65% return is far from exciting, management has increased disbursements for 19 consecutive years. And given that the company’s payout rate is only 26%, there is ample room for it to keep increasing it. Nike also has a four-year, $ 15 billion share buyback program that it launched in 2018. As of May, it had withdrawn $ 4.7 billion of shares under the program.
Two aces up the sleeve
Jon quest (Airbnb): Most people think old companies make the best candidates forever, but I choose a company that was only founded in 2007: Airbnb. The company facilitates short-term rental agreements, allowing hosts to generate income from their properties and clients to find unique places to stay. And looking into the decades to come, I think Airbnb has a couple of aces up its sleeve that will make it a winning investment.
First, the demand for short-term rentals exceeds the demand for hotel rooms. This is a difficult statement to save, but be aware of some statistics. Average Daily Rates (ADR) for Airbnb hotels and rentals go in opposite directions. According to analysts at Transparent, the observer for the short-term rental industry, ADR for hotels is well below pre-pandemic highs, while ADR for short-term rentals has increase. If people pay more, we can reasonably conclude that consumer demand is higher, and vice versa.
According to Airbnb, its ADR increased 41% year-over-year in the second quarter of 2021. This is in part due to a lower supply of space. According to AirDNA, a company that tracks the entire short-term rental industry, overall supply is currently down more than 10% from 2019. Less available space coupled with higher demand is driving up demand. prices, as confirmed by Airbnb’s results. However, the point is, consumers are still willing to pay more for this short-term rental experience, even though hotel availability is high and room prices are low. For me this shows a clear trend: short term rentals are more desirable than hotel rooms.
Second, I believe that the market share gains made by short-term rentals are irreversible. This is old data, but a 2016 survey of Goldman Sachs illustrates the point perfectly. According to the study, 79% of people who have not had a short-term rental experience say they prefer hotels. On the other hand, only 40% of people who have tried a short-term rental still say they prefer hotels.
To reiterate, Airbnb is taking market share from hotels and the change appears to be permanent. Both of these factors benefit the entire short-term rental space. But here’s why I think Airbnb will benefit more than its competitors. In the first nine months of 2020, 91% of Airbnb traffic was organic – it’s the brand people know about, and you don’t have to advertise to attract them. But when he advertises it is even better. The company launched an ad campaign earlier this year and second quarter traffic increased 25% from the second quarter of 2019 in the markets where the campaign ran. The ease with which it attracts customers suggests that it is Airbnb’s game to lose.
Of course, things could still change. For example, laws and regulations could hamper short-term rental business, or Airbnb could slip and damage its branding. So even âstocks foreverâ will need to be watched like any other investment. But as the trends are right now, I think Airbnb is in an excellent position to continue to take its share of an estimated $ 3.4 trillion market.
10 stocks we prefer over Airbnb, Inc.
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Teresa Kersten, an employee of LinkedIn, a subsidiary of Microsoft, is a member of the board of directors of The Motley Fool. Jon quest owns shares of Airbnb, Inc. Keith noonan owns shares of Activision Blizzard and Airbnb, Inc. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool owns stock and recommends Activision Blizzard, Airbnb, Inc., Apple, Microsoft and Nike. The Motley Fool recommends the following options: March 2023 long calls at $ 120 on Apple and March 2023 short calls at $ 130 on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.