Often times, we as investors find so many amazing companies out there but it becomes tough to narrow it down to a scope of only a few companies that you actually want to buy. It can be exhausting trying to keep up and to be honest, it can be very difficult to be consistently correct while picking winners and losers. This article identifies companies that stand above the rest which will continue to dominate in the long term and will continue to make cash flow as well. In addition, these companies have been picked from different industries (such as Technology, Health Care, Financials, Utilities and so forth) because you want to make sure that you are very well diversified if you are investing for the long term.
1. Amazon (AMZ)
Amazon is the world’s largest e-commerce and cloud computing business giving itself an incredibly large channel to fend off is competitors. Amazon has done incredibly well over the past decade with its share price up about 1300% since 2001 and nearly 2000% since their IPO back in 1997.
Needless to say, Amazon is a beast stock with a Market Cap of $1.8 Billion, but they haven’t really done much over the past year over the stock price being overall flat. The CEO Andy Jassy said that the company expects to take on several billion dollars of extra costs in its retail business as a result of labor shortages, higher employee costs, global supply chain constraint along with increased freight and shipping costs.
However, Amazon is a great company for long term investment, which means that it doesn’t make much difference in the short term or a quarterly basis, just like Warren Buffett would say. The key points from their management team include that Amazon is no longer capacity constrained like they were in the pandemic and the company is now on track to over double their fulfillment network ever since the pandemic began. Amazon is seeing accelerating Amazon Web Services (AWS) growth to 39% over the past year from 29%. The management team also emphasized on how customer focused the company really is.
Overall, Amazon is doing just fine in terms of building out their fulfillment network, increasing revenue and increasing the value of AWS and Prime. So, it is important to have a long term mindset when investing in Amazon.
2. Salesforce (CRM)
Salesforce.com, inc. develops enterprise cloud computing solutions with a focus on customer relationship management worldwide. The company offers Sales Cloud to store data, monitor leads and progress, forecast opportunities, and gain insights through analytics and relationship intelligence, as well as deliver quotes, contracts, and invoices. Additionally, the company offers various solutions for financial services, healthcare and life sciences, manufacturing, consumer goods, government, and philanthropy. Right now, the company is trading at $296.84, with a 52 week low of $201.51 and high of $311.75. They have a Market Cap of $290 Billion. It’s also interesting to see what the analysts have to say. On a scale of 1-5, 1 being a strong buy and 5 being a strong sell, the analysts have given Salesforce a rating of 1.8, which indicates that it is quite a good buy.
Salesforce is expected to grow 4x in their business by the year 2030. With CEO Marc Benioff projecting at least $50 Billion in annual sales by 2026. Salesforce is statistically one of the biggest leaders when it comes to Cloud based Customer Relationship Management (CRM). The company nearly 20% of global CRM revenue in 2020, which is 4% to its next closest competitor and more than the 4 closest competitors combined. The company also has a successful history of acquisition purchasing Tableau Software in 2019 and Mulesoft in 2018. Salesforce is a company with a strong foothold of its respective industry, track record of intelligent business decisions and a lot to look forward to in the future. That’s why it is a great stock to hold onto as a long term play.
3. Alphabet Inc. (GOOGL)
Alphabet Inc. is an American Wireless Tech and Internet Company and is the parent company of Google. Founded in 1998 in California, Alphabet Inc. provides online advertising services in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America The Google Services segment provides products and services, such as ads, Android, Chrome, hardware, Google Maps, Google Play, Search, and YouTube, as well as technical infrastructure; and digital content. Right now, Alphabet is trading at $2,941.51 with a 52 week low of $1,699.00 and a 52 week high of $3,037.00. This company sounds very expensive but you are able to invest in partial shares through many brokerages out there. Looking at their 1 year price, you can see that Alphabet has continuously gone up in the last year. They have a Market Cap of $1.9 Trillion, P/E ratio of 28.34 and EPS of $103.81.
Alphabet is very good with their profitability and the profit margin sits at 29.52%. Their current ratio is 2.98 which is very strong. The analysts give it a rating of 1.6, which is between buy and strong buy. Alphabet and Google own Youtube, and according to April Pew Research Report, “Youtube is the most commonly used online platform with 81% of Americans, up from 73% in 2019.” Google has been around for decades and still continues to deliver incredible numbers and surpass analysts’ expectations, which makes it a very good pick for a long term investment.
4. Johnson & Johnson (JNJ)
Johnson & Johnson is an American pharmaceutical company that researches and develops, manufactures, and sells a range of products in the health care field worldwide. It operates through three segments: Consumer Health, Pharmaceutical, and Medical Devices. Right now, JNJ is trading at $159.7, with a 52 week low of $142.86 and 52 week high of $179.92. JNJ has a Market Cap of $420 billion, P/E Ratio of 23.87, and EPS of $6.69, and they have a mild dividend of 2.65%. Their Profit Margin sits at 19.55%. Analysts are currently rating J&J as a 1.9, meaning it’s a “Buy” stock. Johnson & Johnson’s revenues increased to $84.3 billion in 2018.
The company’s business has also ultimately boomed as a result of the Covid-19 Pandemic. JNJ’s single dose vaccine has proven itself sufficiently effective against the virus. Although it did have its fair share of controversies, it expects $2.5 global sales from the vaccines this year. Overall, their medical devices, pharmaceuticals and consumer health have all been upgraded in the recent years and that’s a big reason why Johnson & Johnson is a winner in the long term investment book.
5. Berkshire Hathaway (BRK-B)
Berkshire Hathaway is an American multinational conglomerate holding company headquartered in Nebraska, USA, that is run by Warren Buffett. Berkshire is currently trading at $284.97, with a 52 week high of $221.26 and 52 week low of $295.65. Operating at a Market Cap of $638 billion, their 1 year price chart shows very consistent growth from the past year and is sitting at a Profit Margin of 32%. Analysts are rating BRK-B as 2.4, meaning it’s a “Buy” stock.
Berkshire Hathaway’s companies are expecting to rebound now that the severity of Covid-19 pandemic has lessened. The conglomerate owns several companies like GEICU Auto Insurance, International Dairy Queen, Fruit of the Loom Companies, Duracell, and other companies that rely on basic consumerism that benefit mostly from long term competitive advantages. When investing in Berkshire Hathaway, you are investing in a lot of companies that have been handpicked by Warren Buffett. Another reason to be excited about BRK-B’s long term growth is its massive cash stockpile of $149.2 Billion, which they will potentially use to reinvest in other companies or business opportunities in the future. To invest in this Berkshire Hathaway is to invest in Warren Buffett’s portfolio and it is very difficult to ignore his remarkable success in the stock market.
6. Microsoft (MSFT)
Microsoft Corporation is an American Tech Company that develops, licenses, and supports software, services, devices, and solutions worldwide. Its Productivity and Business Processes segment offers Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, and Skype for Business, as well as related Client Access Licenses (CAL); Skype, Outlook.com, OneDrive, and LinkedIn; and so on. Microsoft is trading at $337.68 with a 52 week low of $209.11 and 52 week high of $349.67. Looking at their 1 year price chart, you can see that in the latter half of 2020, their price was pretty stagnant but ever since 2021 started, their prices have been jumping up quite significantly. Microsoft have a Market Cap of $2.5 Trillion, P/E Ratio of 37.78, EPS of $8.94, and have a mild dividend of 0.73%. Their profitability is quite strong with a Profit Margin of 38.5% and are sitting on a total cash of $130.5 Billion and hold a strong Current Ratio of 2.16. Analysts rate Microsoft as 1.7, which is between strong buy and buy.
Microsoft has specifically thrived in the sectors of Cloud Computing and Gaming. The company’s Intelligent Cloud made up $15.1 Billion out of $41.7 Billion in its total revenue, which was 23% growth from the previous years. Overall, Microsoft is one of the companies that should continue to grow over the next decade and beyond. That is precisely why one shouldn’t sell its stocks unless hit by an extraordinary circumstance.
7. Apple (AAPL)
Apple Inc. is an American multinational technology company that specializes in consumer electronics, computer software and online services. Apple is the largest information technology company by revenue and, since January 2021, the world’s most valuable company. The company offers iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi-purpose tablets; AirPods Max and so on. Apple is trading at $161.41, with a 52 week low of $115.178 and 52 week high of $165.70. Their 1 year price chart shows overall growth in the last year but there have definitely been some dips along the way. Apple has a Market Cap of $2.65 trillion, a P/E ratio of 28.77, EPS of $5.61 and a small dividend of 0.55%. Analysts do like Apple rating it as a 1.9, meaning it’s a Buy.
Recently, Apple’s strong Mac sales and better than expected phone sales have really pushed sales numbers through the roof. Because Apple is a $2 trillion company, they have been revolutionizing tech for decades. Short term volatility and unpredictability shouldn’t be a major issue if you ever decide to invest in their stocks. Apple is very fundamentally strong company and is always going to be one of the top buys in the long term.
8. PayPal Holdings, Inc. (PYPL)
PayPal Holdings, Inc. operates as a technology platform and digital payments company that enables digital and mobile payments on behalf of consumers and merchants worldwide. Right now, the company is trading at $188.05, with a 52 week low of $ 184.27 and high of $ 310.16. They have a Market Cap of $ 220 Billion. It’s also interesting to see what the analysts have to say. On a scale of 1-5, the analysts have given Paypal a rating of 1.8, which indicates that it is quite a “buy”. The company has a PE ratio of 45.22 and EPS of $ 4.16.
Paypal makes online payments safer and more convenient. PayPal boasts a consistent track record of earnings and sales growth, stretching back to at least 2010. In that year, it earned a mere 29 cents per share. In 2019, the company reported EPS of $2.96 per share. For 2020, the firm’s earnings grew 31% to $3.88 a share. Analysts expect the company’s EPS to grow 21% in 2021 and another 25% in 2022.
PayPal’s Venmo and the Square Cash App started off as person-to-person money-transfer services for family members and friends. Now they’ve evolved into broad consumer financial services apps fueling growth for these leaders in the burgeoning field of digital payments. Since we are moving to a cash less society and more and more people are buying things using Paypal, this will only make the company even more valuable in the future. This is why Paypal has made into the list of long term investment stock.
9. Meta Platforms, Inc. (FB)
Meta Platforms, Inc. develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide. Meta Platforms, Inc., doing business as Meta and formerly known as Facebook, Inc., is a multinational technology conglomerate based in Menlo Park, California. The company is the parent organization of Facebook, Instagram, and WhatsApp, among other subsidiaries. Meta is trading at $ 337.25 with a 52 week low of $ 244.61 and a 52 week high of $384.33. Looking at their 1 year price, you can see that Meta Platforms has continuously soared in the last year with some plunges throughout the year. They have a Market Cap of $938.149 Billion, P/E ratio of 24.13 and EPS of $13.97.
Meta has grown to become one of the largest and most well-known tech companies in the world. Since its IPO in 2012, the company’s shares have risen greatly, and despite some bumps in the road, reached all-time highs in the summer of 2021. Meta’s profitability is also quite high leaving it at a Profit Margin of 35.88%. Its total revenue also jumped from $70,697,000 in 2019 to $85,965,000 in 2020, and the analysts have only expected it to soar in the next decade and beyond, which is why Meta is a good company to have on the watchlist for long term investment and hold forever.
10. Lucid Group, Inc (LCID)
Lucid Group, Inc is a technology and automotive company, develops electric vehicle (EV) technologies. The company designs, engineers, and builds electric vehicles, EV powertrains, and battery systems. As of June 30, 2021, it operated eight retail studios in the United States. The company is headquartered in Newark, California. The Lucid Motors IPO debuted on July 26, as Churchill Capital Corp. IV announced a deal to take Lucid Motors public, valuing the company at $24 billion. The company is going public “to accelerate into the next phase of our growth,” Lucid Motors CEO Peter Rawlinson said. Lucid Group is currently trading at $52.44, with a 52 week low of $9.70 and 52 week high of $64.86 which indicates a major improvement in the share price. Operating at a Market Cap of $86 billion. They are a relatively new company, but ever since their IPO they have had a tremendous increase in the share price, which is why analysts are rating LCID as 2, meaning it’s a “Buy” stock.
11. Costco Wholesale Corporation (COST)
Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses all across the globe, offering branded and private-label products in a range of merchandise categories. Costco is currently trading at $549.73, with a Market Cap of $242 Billion. They have a 52 week high of $307.00 and 52 week high of $550.83.
Analysts have given it a rating of 2.2, meaning it’s a buy. But what gives Costco their competitive advantages against other retailers is that they have extremely low prices along with a limited supply of their products. SO, that results in a high inventory turnover rate and sales rate. Along with being a retailer, Costco should definitely be considered a real estate company as well because they do own 80% of their properties they operate in. Just in 2018, Costco operated 762 warehouses where the average size of the warehouse was 144,500 square feet. Taking a look at Costco’s past 1 year stock performance, we do find that they have done incredibly well. The company’s stock prices went up to $550.83 from $307.00 in 2021 showing a 41.9% of growth. It should also be noted that Costco is a mild dividend payer. Their current dividend yield is 0.58%. Despite their low yields, they have been paying their dividend consistently for years. Given all of this, Costco is an amazing company and it’s hard to deny that they have an incredible future growth ahead of them.
12. Walmart Inc. (WMT)
Walmart Inc. engages in the operation of retail, wholesale, and other units worldwide. It operates approximately 11,400 stores and various e-commerce websites under 54 banners in 26 countries. Walmart Inc. was founded in 1945 and is based in Bentonville, Arkansas. It offers a variety of products ranging from foods, beverages, beauty products, tools, furniture, and equipment and so on. They are currently sitting at a Market Cap of $408 billion. Walmart is trading at $146.54, with a 52 week high of $126.28 and a 52 week low of $153.66. Analysts give it a rating of 1.9, which means WMT is a buy. Their current dividend yield is 1.51%. Walmart is a dividend aristocrat where they have been increasing the quarterly dividend every single year for the last 48 years. It’s quite obvious that the dividend isn’t quite high but compared to other companies, their dividend is respectable enough to invest in their stocks.
Walmart is an interesting stock because it’s almost an even mix of potential to earn money from the share price growing up or from their dividend yield. This company really gives you the best of both worlds in terms of able to make money from quarterly dividend as well as the natural appreciation of their share price. Looking at their 5 year price chart, one wouldn’t even notice that there was a global pandemic in 2020, as their stock price has been on a growth for years from $60/share to around $150/share showing a growth rate of 105% in 5 years’ time. Walmart could be a solid investment because they tend to do really well even during the recession.
13. McDonald’s Corporation (MCD)
McDonald’s is an American fast food company, founded in 1940 that operates and franchises restaurants in the United States and internationally. Its restaurants offer various food products and beverages, as well as breakfast menu. As of December 31, 2020, the company operated 39,198 restaurants all across the globe. MCD is currently trading at $257.11 with a 52 week low of $202.73 and a 52 week high of $257.79. They have a Market Cap of $192 billion and they are currently paying a dividend of 2.15%. Analysts have given it a rating of 2, meaning it’s a buy.
Over the past 10 years, this company has been doing incredibly well posting insane returns, upwards of over 100% over the past 5 years alone. Talking about the business itself, there are so many redeeming factors about McDonald’s that makes it an amazing company. First of all, McDonald’s is very focused on real estate, especially owning very prime and convenient locations of real estate all across the world. All of these property values are surely going to appreciate over time being in such prime locations. McDonald’s is also venturing into many different avenues to improve the technology of their business and one of this is McDonald’s delivery.
MCD has been making every effort to boost its McDelivery channel, which was first launched in 2017. The company announced two strategic partnerships with DoorDash and Uber Eats. McDelivery provides delivery from more than 32,000 restaurants worldwide. Previously, the company reported that digital sales crossed $10 billion or nearly 20% of system-wide sales in 2020 across its major six markets.
Furthermore, the company is modernizing menu of their different locations across the world and they are also adding technological advances to be able to make a seamless experience for their customers. Given its incredible success and market returns, MCD could be a very good investment option for long term.
14. The Walt Disney Company (DIS)
The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide. The company was founded in 1923 and is based in Burbank, California. Disney is currently trading at $151.34 with a 52 week low of $146.29 and a 52 week high of $203.02. They have a Market Cap of $275 Billion. Disney is a very well diversified entertainment company and they do not have a lot of competition inside their main hub, because they have their theme parks across the globe, movies and entertainment. They also own their own radio station, different TV stations and, on top of that, licensing of their different characters that they have. The total revenue of Disney has seemed to go down from $69,570,000 in 2019 to $65,388,000 in 2020 because of the global pandemic. However, in 2021, they have started to get back on track collecting a total revenue of $67,418,000.
Disney also started a streaming service called Disney Plus since 12th of November 2019 .The streaming strategy and its potential to boost future profits has received much publicity since Disney+ launched, but the overall business still heavily relies on Disney’s theme park operations. Before the pandemic, the parks segment contributed 38% of revenue for the fiscal year ended Sept. 28, 2019. In the first six months of 2021, that share of overall revenue was down to 21% as parks slowly reopened and with some capacity limitations. However, the company has proved it can succeed in the long term. As previously mentioned, it has handily beat the S&P 500 over the last decade. Also at some point, Disney will feel confident enough to either reinstate its dividend or use excess cash flow to invest back in the business or a combination of both. So, investors should take advantage of this dip to buy its undervalued stocks before its share price goes back up.
Long-term investors should feel confident that the brand will remain strong enough to support whatever direction the business takes in the future. That brand and the diverse businesses built around it are what make investing in Disney worth the risk in a portfolio constructed for the long term.
15. PepsiCo, Inc. (PEP)
PepsiCo, Inc. operates as a food and beverage company worldwide. The company operates through seven segments: Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East and South Asia; and Asia Pacific, Australia and New Zealand and China Region. PepsiCo is currently trading at $163.74 with a 52 week low of $128.32 and 52 week high of $166.50. They have a Market Cap of $226 Billion and they have a dividend yield of 2.60%. They have a quite impressing ROE of 55.41%.
Looking at PEP’s 1 year chart, they have shown a 13% growth in their share price. Pepsi’s third-quarter profits and revenue came in higher than expected. Pepsi had a great pandemic year in terms of navigating through the craziness, and they were able to keep organic sales growing at about the same rate they did the year before which was a multiyear high for them, around 5%.
Growth in consumption of soft drinks, bottled water and snacks is closely correlated with global GDP growth and population growth, which bodes well for Pepsi as more people around the globe enter the world’s middle class. According to the company’s 2021 presentation at the Consumer Analyst Group of New York, Pepsi currently has a 9% share of the $570 billion global beverage business.
Pepsi currently pays a dividend that yields just under 3%, adding to its defensive prowess and making it a great choice for income-seeking investors. Pepsi shareholders can expect the company to continue to return cash to them via its dividend and to continually increase this dividend for the foreseeable future. Pepsi’s shares have proven their resilience during market turbulence and this defensiveness combined with a steady, growing dividend payout make Pepsi a strong choice to be a foundational part of a well-balanced portfolio.
16. Roblox Corporation (RBLX)
Roblox Corporation develops and operates an online entertainment platform, where users can build and explore digital environments and interact with other users. Roblox Corporation was incorporated in 2004 and is based in San Mateo, California. Roblox is currently trading at $124.23, with a 52 week high of $60.50 and a 52 week low of $141.60. They have a Market Cap of $71.9 Billion and their 1 year chart shows around 65% growth in their stock price. RBLX saw 50.5m average daily active users in October, 2021, with 3.2 billion engagement hours and bookings between $177n-$179m.
Roblox runs on the freemium model; the site is free to join, and most experiences and items found during gameplay are also free. Roblox recorded bookings of $637.8 million in the quarter, beating analysts’ expectations of $636.5 million, according to Refinitiv. That represented a 28% jump compared with the same quarter in 2020. Average daily active users checked in at 47.3 million in Q3, a 31% year-over-year increase.
Overall, Roblox boasted 47.3 million daily active users (DAUs) at the end of its fiscal third quarter. That was up 31% from the same quarter last year when it had 36.2 million DAUs. Interestingly, Roblox has surged since the pandemic onset when hundreds of millions of people were forced indoors due to the outbreak of COVID-19. Roblox is the pioneer of the Metaverse (a digital experience that blends virtual reality, streaming video, mobile games) and the “multitrillion-dollar” potential of the metaverse makes RBLX an undoubtedly incredible option to add into your portfolio.
17. Pubmatic Inc. (PUBM)
Pubmatic is an advertising company that connects publishers with advertisers so that they can find the space they need to market their products. The publishers earn revenue by marketing these products through their respective platforms or businesses. Right now, 1 share of Pubmatic is trading at $39.62, with a 52 week low of $21.61 and a 52 week high of $76.96. They have a Market Cap of $2.02 billion, a P/E ratio of $55.29 and EPS of $0.71. They also have a really good ROE of 28.69. Analysts have given it a rating of 1.9, meaning it’s a buy and the price target of $52.90, which is about 33% higher than the current one.
The company’s Q3 2021 reported year over year revenue growth of 54% and income growth of 117%. They also grasped a substantial growth of advertising customers in their company. This company is worth taking a look into, given that it has displayed strength and competitive advantage within less than a year since its IPO.