It is not wrong to have strict criteria in place when choosing companies to invest in in the long run. After all, if you intend to park your money for years and still enjoy a good night’s sleep, these companies should have certain key features that make them attractive for long-term investment. Not many companies make the cut, but for those who do, it is worth taking another look at them.
Some aspects that I look for are companies that have a strong competitive moat and are market leaders in their respective industries. Ideally, they should have a long track record of increasing their revenue, net profit and cash flows, while also having a good starting path for future growth. Finally, they must prove resilient to crises such as the current COVID-1
After filtering out a whole range of companies, there are three stocks that you can certainly buy and hold forever.
PayPal (NASDAQ: PYPL) is a major player in the online payment and money transfer industry. The pandemic has accelerated the shift to online communication and work and study from home and has also pushed more people to use e-commerce and online payments as lockdowns continue. The company is a major recipient of this shift as it experienced the strongest growth in total payment volume and revenue in its history in the third quarter.
Total payment volume increased 36% year-over-year to $ 247 billion, raising net revenue by 25% year-on-year to $ 5.5 billion. There was an increase in new active accounts in the quarter, an increase of 55% year-on-year to 15.2 million. Prior to this amazing performance, PayPal had already shown a steady and constant growth over the years. Net revenue grew from DKK 9.2 billion. Dollars in 2015 to 17.8 billion. Dollars in 2019, while net income doubles from 1.2 billion. Dollars to 2.5 billion. Dollars in the same period.
The company does not stand still, but continues to move forward with strategic initiatives to increase reach. It expanded its “buy now, pay later” service in the US and UK, helping retailers capture more transactions without additional risk, while allowing customers to make purchases at interest-free rates. PayPal also introduced its Venmo credit card in partnership with Visa (NYSE: V) and announced a new check-cashing feature for customers on its digital wallet, making the service more convenient and hassle-free for them.
One of the largest sports footwear and apparel companies in the world, Nike (NYSE: OF), has been shown to be remarkably resistant during this pandemic. The company is known for its innovative footwear such as Vaporfly and Alphafly Next%, which improve athletes’ performance during a competition. For its fiscal earnings in the first half of 2021, the company reported a surprising increase in revenue of 4% over the year to $ 21.8 billion, while net income increased by 12% year-on-year to $ 2.8 billion. Notable was Nike’s digital sales momentum, with digital sales rising 84% year-over-year with triple-digit year-on-year increases recorded in North America. Nike’s digital strategy is bearing fruit and promises a long path with continued growth for the company.
The company is not slowing down its product launches, even with the pandemic. John Donahoe, CEO of Nike, spoke about the new launches of LeBron XVIII and Kyrie 7 in the quarter, which met with an enthusiastic response. And Nike’s latest edition, the Mercurial Vapor 14 boot, promises to allow athletes to make sharp turns without losing their balance.
Nike recently increased its quarterly dividend by 12% year over year to $ 0.275 per share. Share, making this the company’s 19th year in a row with dividend increases. This move brings it ever closer to becoming a dividend aristocrat.
Tractor supply company
Tractor supply company (NASDAQ: TSCO), the largest retailer of rural lifestyle in the United States with a total of 1,904 stores in 49 states, has continued strong growth despite the downturn. Net sales in the third quarter of 2020 increased 31.4% year over year, while comparable store sales increased 26.8% year over year. Net income increased by 56% year over year as the pandemic caused more customers to focus on caring for their homes, land and animals, increasing demand for the company’s products.
Even before the crisis, the Tractor Supply Company was already growing steadily. From 2015 to 2019, sales increased every year without going, from $ 6.2 billion to $ 8.4 billion, while net income increased from $ 410.4 million to $ 562.3 million. Declared dividends also increased along with net income, rising from $ 0.76 in 2015 to $ 1.36 in 2019. The company has a strong track record of increasing the number of stores by about 10% compounded annual growth rate over the last 20 years.
The company’s “Life Out Here” strategy focuses on five pillars: Customers, Digitization, Execution, Team Members, and Total Shareholder Return. This strategy promises to continue to drive growth for the company as it anchors itself as the site of rural and agricultural equipment. Tractor Supply Company operates in a highly fragmented market and sees a total addressable market opportunity of $ 110 billion, of which it has only a market share of 10%, which implies a significant room for further capture of market shares. In addition, the company has also identified opportunities for new store growth to eventually bring the store count to 2,500.