In the long run, there is no better chance than the stock market. Despite undergoing numerous important corrections, including the dot-com bubble in the early 2000s, the great recession of 2007-2009 and the coronavirus accident, the benchmark S&P 500 delivered an annual average total return (ie dividends included) of 10.9% over the next 40 years. In other words, it takes less than seven years for investors to double their money.
But as investors, we are also aware that no two stocks are alike. Businesses that can offer game-changing innovation or disrupt big-dollar industries can deliver a portfolio of market profits. These are the type of companies that investors want ten years, if not longer.
If you are ready with cash and you want to add potential disruptions in the industry to your portfolio, there are four to buy and hold for the next decade.
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Square
The war on cash is well underway. In the coming years, we are likely to see a continued shift to plastic and digital payments. No matter which path businesses and consumers choose, Square (NYSE: SQ) stand to benefit.
Most people are familiar with Square because of the sales equipment it provides to small retailers. Between 2012 and 2019, the gross payment volume (GPV) that crosses Square’s network catapulted from $ 6.5 billion to $ 106.2 billion (an annual growth rate of 49%). Interestingly, the company has become more skilled in recent quarters at attracting larger retailers. As it is an industry segment with remuneration, traders who generate more annual GPV should be a big plus for the company.
An even more impressive growth operator for Square is its digital payment platform, Cash App. Between late 2017 and mid-2020, Cash App’s monthly active user more than quadrupled to 30 million. People use Cash App to make payments, start bank transfers and invest. Cash App has become especially popular for Bitcoin exchange too.
In terms of fintech stocks, Square could lead the package in the annual growth rate over the next ten years.
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Intuitive surgical
Another disruptor in the industry that plans to grow is the development of a robotic surgical system Intuitive Surgical (NASDAQ: ISRG). Intuitive’s most important turnover, the da Vinci surgical system, is used in place of traditional laparoscopic surgery for certain soft tissue procedures.
Since 2000, the company has installed nearly 6,000 of its da Vinci surgical systems in hospitals and surgical centers around the world. It probably does not sound like much, but it is more than all the competitors of the company put together. Intuitive Surgical has built up invaluable value in the medical community and its competitive advantage seems virtually insurmountable.
Its business model was also built to improve with age. As more da Vinci systems are installed, the company will generate a larger percentage of its sales from the instruments and accessories sold with each procedure, as well as through the regular service of these systems. Both of these segments generate significantly juicier margins than selling the expensive but expensive da Vinci systems.
The company has a large runway to expand to thoracic, colorectal and general soft tissue procedures. It also introduces new devices (for example, the Ion minimally invasive lung biopsy). Intuitive Surgical therefore seems to be an unstoppable force in the health space.
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NextEra Energy
When you think of disruption, you probably do not think of electrical supplies. The greatest electrical utility of all, NextEra Energy (NYSE: NO), is changing the game for the entire industry.
NextEra has long relied on fossil fuels to generate electricity and was the first major utility industry to truly adopt renewable energy sources. Today, no U.S. utility industry generates more solar or wind capacity than NextEra. Although these renewable energy investments are not cheap – the company expects to spend up to $ 55 billion on new infrastructure investments between 2020 and 2022 – they are paying for significantly lower power generation costs and a long-term single-digit growth rate. NextEra-sized electric electricity services simply do not grow by 7% to 9% annually.
Shareholders of NextEra also enjoy the predictability of the utility industry. With a few exceptions, the demand for basic services such as electricity is relatively constant, no matter how well or poorly the US economy performs. This means highly predictable cash flow and sustainable profits.
Let it be a lesson not to judge a book by its cover. Utility supplies are tedious, but they can still be disruptive.
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Etsy
Disrupting the store space is not easy with types such as Amazon and Walmart throw their weight around. But consumers like it Etsysay (NASDAQ: ETSY) unique online market.
Etsy stands out in a very busy shopping space thanks to the emphasis it places on small businesses and personal commitments. The Etsy market is home to small businesses that are willing to customize products or otherwise go the extra mile for consumers.
Although the company has undeniably benefited from the coronavirus pandemic, its sales path has been showing higher for years. Gross trade sales effectively doubled in the first nine months of 2020, with net income more than tripling to $ 200.7 million. Best of all, existing customers have significantly increased their buying operations, which is the key to sustainable larger profits from Etsy.
Etsy also invests heavily in segments that earn a high margin. For example, it recently released promotional videos and reworked its Etsy Ads infrastructure to give merchants more relevant data.
Consider Etsy as the online platform with the local attraction that buyers appreciate.