3 More Stocks for the Next 50 Years
Feb 28th 2013 4:44PM
Updated Feb 28th 2013 5:05PM
Over the last half-century, the world has largely stopped measuring the average holding period for stocks in years. Instead, by some accounts, today's impatient investors might hold any given stock for just a few months -- or, even worse, a few days. As a result, many wonder whether it's useless to look for investments they could safely hold for decades.
As I pointed out last week, however, many of the world's most successful investors have done exactly that, relying on the stocks of the world's greatest companies to build their incredible fortunes.
With that, here are three more stocks I'm convinced any long-term investor could be happy to hold for the next 50 years.
First up, consider bagging shares of organic grocer Whole Foods Market . After all, people will still need to eat over the next half-century, and buying Whole Foods could be the perfect way to benefit from consumers who are increasingly searching for healthier options.
Of course, Whole Foods shareholders were treated to a 9% plunge two weeks ago after the company warned investors to expect sales growth of only 10% to 11% for 2013, down from 13.7% in 2012. Why the decrease? To better compete with massive rivals like Safeway and SUPERVALU, Whole Foods is choosing to place more emphasis on value items, which typically carry lower margin. Whole Foods co-CEO Walter Robb elaborated, "We know that one of the keys to broadening our appeal when growing our sales over the longer term is to improve our value positioning."
In response, I could almost hear our manic market ironically screaming, "How dare you focus on long-term sustainability!"
Fortunately for investors, Robb's use of "longer term" isn't an understatement; though Whole Foods boasted 345 worldwide stores at the end of 2012, international sales only accounted for 3.2% of the company's total revenue for the year. That said, management hopes to eventually have 1,000 locations in the United States alone, so even if were to ignore Whole Foods' massive international potential, it's a safe bet investors can look forward to decades of predictable, profitable growth.
(Power)house of mouse
Next up, why not entertain the thought of buying media giant Disney ?
Nowadays, to call Disney the "House of Mouse" is to vastly understate its multiple empires. All told, Disney generates loads of cash from its parks and resorts and media networks segments, the latter of which includes full ownership of not just The Disney Channel and ABC Family, but also significant stakes in ESPN and A&E Networks. When combined, these two segments accounted for more than 76% of the company's total revenue last year and are largely responsible for ensuring its relative stability.
So what happens if the parks and networks have a bad year? Patient investors can still rest easy collecting Disney's dividend while they wait for their shares to rebound.
If that weren't enough, Disney not only produces and distributes films under its Walt Disney Pictures banner, but also acquired animation specialist Pixar in 2006, comics giant Marvel Entertainment in 2009, and Star Wars creator Lucasfilm late last year.
Color me convinced, but when we consider Marvel's 9,000-plus-character universe and the more than 100 Star Wars novels in existence, those properties alone could give Disney enough material to entertain audiences for a lifetime. And when the credits roll, you can bet Disney will be happy to benefit from each blockbuster's respective merchandise.
Shirts, shoes, and long-term growth
Last but not least, assuming the prediction of rotund characters from Disney Pixar's Wall-E doesn't come to pass, you can also be sure people will still want to stay active down the road. With this in mind, Under Armour will be happy to help you run your bases.
Under Armour's fourth-quarter net revenue grew 25% year over year to $506 million, marking its 11th consecutive quarter of exceeding management's stated goal of 20% net revenue growth.
How, you ask, will Under Armour be able to keep up the pace? After all, it dominates the niche domestic performance apparel market that helped it become a household name in the first place, and that segment was responsible for 76% of its revenue in 2012.
Even so, it's worth noting that Under Armour's footwear segment -- which didn't exist prior to 2006 -- generated 13% of the company's total sales last year. Even so, Under Armour's 2012 footwear revenue of $239 million represents a drop in the multibillion-dollar global footwear market, so its new shoes still leave plenty of room for the company to grow.
On that note, while Under Armour's international revenue grew an impressive 30% in the fourth quarter, domestic revenue still made up more than 94% of its total sales in 2012. Like Whole Foods, then, Under Armour's international growth potential is also staggering.
If Under Armour has its way 50 years from now, it will stand as a global athletic apparel and footwear powerhouse, fearlessly challenging any company that dares to compete. While you can bet today's well-financed industry giants like Nike won't easily give up their market share, Under Armour has repeatedly shown it's more than capable of using its innovative roots to take it.
To the patient investors go the spoils
Whether you like running shoes, Star Wars, or groceries, I'm convinced each of these companies has what it takes to not only survive but also thrive over the long haul.
In the end, it's up to you to exhibit the Foolish patience necessary to achieve the mind-boggling, life-altering returns long-term investing has to offer.
More expert advice from The Motley Fool
It's hard to believe that a grocery store could book investors more than 30 times their initial investment, but that's just what Whole Foods has done for those who saw the organic trend coming some 20 years ago. However, it may not be too late to participate in the long-term growth of this organic foods powerhouse. In this brand-new premium report on the company, we walk through the key must-know items for every Whole Foods investor, including the main opportunities and threats facing the company. We're also providing a full year of regular analyst updates to go with it, so make sure to claim your copy today by clicking here.
The article 3 More Stocks for the Next 50 Years originally appeared on Fool.com.Fool contributor Steve Symington owns shares of Under Armour. The Motley Fool recommends Nike, Under Armour, Walt Disney, and Whole Foods Market. The Motley Fool owns shares of Nike, SUPERVALU, Under Armour, Walt Disney, and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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